Historic drop on Wall Street: What you should do about it

(AP Photo/Richard Drew)

SPRINGFIELD, Mass. (WWLP) – At the opening bell, the Dow Jones Industrial Average plunged. In its largest drop ever, the average lost 1,000 points in just five minutes. The huge downward shift caused great concern among some investors, who began calling their financial advisors.

Mark Teed, Senior Vice President at Raymond James and Associates in Springfield, told 22News that the massive sell-off was due to the slowing of China’s economy. Teed explained that for years, the world has tried to invest in China, the second-largest economy in the world. When economic momentum started slowing down there, every market began noticing the effects.

Moments after Monday’s initial spectacular drop, there was some rebounding, however. By 11:45 A.M., the Dow had recovered the vast majority of its losses, and was down only about 200 points.

Teed said that in these situations, people want to do something to protect the money they have invested. He said that if you do want to act, look at your portfolio and see if there are any dividend-paying stocks that you can buy.

If you would rather not do that, Teed advises that you take no action, and play it out.

“Today is a good day to look at the markets, but don’t do anything rash because generally you’ll regret it. If the market goes way down today, and you sell out, there’s a good chance it will go up tomorrow and you’ll kick yourself,” Teed said.

Teed predicts that we may see rallies Monday afternoon and by Tuesday as people start taking advantage of the lower stock prices, and buying them up. He said that historically, that is what has happened, and that could help correct the market.

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