COLORADO SPRINGS – On Thursday the Dow took a plunge for the second straight day, down more than 1,300 points in just 48 hours.
Certified Financial Planner Susan Strasbaugh of Buckingham Strategic Wealth said the big drop is primarily driven by tech stocks.
“You’ve seen money flow out of technology stocks and into safer places…technology stocks are what have really increased dramatically in the last couple of years and over the last year in particular, so they’ve been really leading the downturn as people are looking for a safer haven for their money.”
However, while stocks like Facebook, Apple, Netflix and Google have decreased between 8 and 10 percent, Strasbaugh said it’s “certainly not a time to panic and run for the hills…this is a normal part of a market cycle.”
She said it’s also a good time to reassess your situation as an investor.
“This is a really good opportunity to kind of check your appetite for risk, not a time to panic and sell, but if it’s money you need in the next five years it really shouldn’t be invested in stocks.”
If the Dow drops more, which wouldn’t surprise Strasbaugh, it could be an opportunity to buy. For those not playing the stock market game there’s not much they can do.
“I would say the biggest thing for the average individual right now is that interest rates are going up so this is going to make mortgages more expensive. It’s going to make car loans more expensive, consumer debt.”
The promising news though, Strasbaugh said after years of growth a correction could be looming in the market. She said it should be small and not a dramatic crash like in 2008 which led to the recession.
Something else that’s also affected tech stocks are tariffs. Strasbaugh said the uncertainty with China and the possibility of not being able to market goods as much there is playing into this as well.