MYNORTHWEST NEWS

Analysts: Stop worrying, stock market fall isn’t as bad as you think

Aug 24, 2015, 10:41 AM | Updated: 3:02 pm

Analyst warn investors not to freak out too much over Monday’s stock market decline....

Analyst warn investors not to freak out too much over Monday's stock market decline.

The U.S. stock market took a dive as trading opened up Monday, following more problems with the Chinese stock market. But before you get too worried about your portfolio, analysts are urging calm.

“I don’t want to go nutty here, but this is part of what being an investor is. It’s also why, no matter what … we invest in diversified portfolios,” CBS analyst Jill Schlesinger told KIRO Radio. “Everything that is going on right now is actually kind of normal.

Related: Dow industrials down 435

“We have had quite a long time since our last correction, it’s been four years and we usually have them every year or year and a half,” she added. “So the fact that it has been a long time, it has made us a bit complacent.”

Schlesinger notes that people should not start likening Monday’s situation with past financial horrors, such as in 2008 and 2009.

“When you go back to 2008, that was scary because that wasn’t very normal to have a financial crisis with banks failing,” she said. “This is just run-of-the-mill fears about growth; jitters.”

Related: Dave Ross offers a soothing poem to ease stock market tensions

The Dow Jones industrial average plunged more than 1,000 points shortly after the open of trading, before regaining ground throughout the day. Despite rallying after the initial sell-off, the Dow ended the day 588.40 points, or 3.6 percent, lower.

The point decline was the eighth-largest ever, but on a percentage basis, it doesn’t make the top 10 declines for the index, according to S&P Dow Jones Indices.

The shock to the market was largely blamed on finances halfway around the globe.

“The brokers right now are pretty much centering on China,” said CBS reporter Jason Brooks. “We saw the Shanghai suffer its biggest one-day decline in eight years. That’s saying something.”

China’s main index plunged 8.5 percent recently. That’s the Shanghai index’s most significant decline since February 2007, the Associated Press reports. Many of China’s companies have struck 10 percent downside limits. While the Chinese market remains more than 40 percent above the level it was at last year, it has lost all of its gains for 2015.

“China’s stock market has just tanked over the last three months as the country’s economy has slowed down; perhaps even more so than Beijing is letting on,” Brooks said. And Beijing is making one move after another to try to prop up the economy. So far none of that is working. You got a lot of uncertainty out there. And when you’re talking about the second biggest economy, which has been the strongest growing economy in recent years, it’s a worry for the rest of the world.”

Brooks agrees with his CBS colleague, Schlesinger, and said that Monday’s market hiccup isn’t something to start getting too worried about.

“You got to keep in mind, it’s all relative,” he said. “It’s still not anywhere near the biggest percentage decline in the Dow’s history. And that is what you have to go by.”

And in the big picture, Schlesinger said, the United States is actually on a pretty good financial path.

“Go back to 2011, the last time we had a correction,” she said. “Since then, we’ve had millions of jobs created. The unemployment rate has gone down, the housing market has firmed up. U.S. households are in better shape, we’ve paid down debt, and we’ve saved more money.”

The Associated Press contributed to this story.

MyNorthwest News

Seattle Police bonuses hiring incentives...

Frank Lenzi

Seattle Police Department scraps $50K hiring bonuses Sept. 1 as staffing crisis deepens

The Seattle Police Department (SPD) will no longer offer hiring bonuses as of September 1, citing budget concerns.

8 hours ago

man killed goose...

Jack Bilyeu, KIRO 7 News

Seattle Animal Shelter looking for man who killed goose at South Lake Union

The Seattle Animal Shelter is investigating an animal cruelty case after a man killed a goose on South Lake Union.

8 hours ago

Sound Transit Light Rail Fare Gates...

Frank Lenzi

Sound Transit approves fare gates at 14 light rail stations, eyes up to $83M in new revenue

Sound Transit plans to bring fare gates to up to 14 of its light rail stations — a move that could generate nearly $83 million a year in net revenue.

8 hours ago

brush fire SR 104...

Jason Sutich

Overnight closure likely on SR 104 after brush fire spreads to wires in Jefferson County

The westbound direction of SR 104 near Southpoint Road is blocked Thursday due to a brush fire that has spread to telephone wires.

9 hours ago

paddleboarder Lake Washington...

KIRO Newsradio staff

Paddleboarder in critical condition after being pulled from Lake Washington

A paddleboarder is in critical condition after being pulled from Lake Washington.

10 hours ago

wildfire JBLM washington soldiers...

Tim Hohl

Washington native leads JBLM soldiers into wildfire fight

Roughly 240 active-duty soldiers from JBLM are helping fight one of Washington’s biggest wildfires. The colonel overseeing them is a Washington native.

10 hours ago

Analysts: Stop worrying, stock market fall isn’t as bad as you think