Financial expert says its not time to panic after stock market dip
Many folks are scrambling to figure out how recent stock market drops will affect their retirement. Mark Peterson, chair of the Southern Illinois University Department of Finance, says it’s not time to panic.
"I tend to be one who thinks that the market is always right, and new information has come out," Peterson said.
Word that china was restricting imports sent markets spiraling, and ultimately cost you money.
"If they had a broadly diversified mutual fund, maybe as much as 5 percent," Peterson said.
"Five percent may not seem like much, it’s just a nickel for every dollar in your 401k," he added. "When you spread that nickel out across thousands of dollars, you can see how that can quickly add up."
Peterson said there’s always a chance of loss when investors buy risky securities.
"It’s safe to be prepared for a big downside as well as a big upside," Peterson said.
However, Peterson said at this point there’s no need to fear a repeat of the 2008 economic downturn.
"The recession in 2008 and the financial crisis that surrounded it was more prolonged and widespread. When put into perspective, how much the markets have appreciated over the last year or two, they should still be ahead," Peterson reasoned.
There is concern if you plan on retiring in the next year, but Peterson said it’s best to sit tight and contact your financial adviser.