Stock market volatility and it's impact on retirement plans - Western Mass News - WGGB/WSHM

Stock market volatility and it's impact on retirement plans

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It's been a rocky ride on Wall Street over the last two days.

The DOW Jones opened down 550 points, or 2.25 percent one day after the DOW's largest single day point loss in history.

On Tuesday morning, the DOW swung, plummeting and spiking hundreds of points in just the first hour.
At the end of the day, the DOW closed up 567 points, ending at 24,912.

So what does this Wall Street roller coaster ride mean for investors and people looking at their 401(k) retirement plans?

Experts say don't panic, and don't be impulsive as economic signs are good.

Unemployment is at an 18-year low, and wages are up, so your best bet is stick with your investment game plan.

"We went through a 900 point swing in the first 14 minutes of trading this morning, that is a violent market," said Financial Adviser, Brian Corridan. 

Corridan said the U.S. economy is strong.

"For the last month everyone has been admiring their 401(k), but everyone was also saying there's going to be a correction , the correction is here," Corridan noted. 

The market carnage on Wall Street began Friday after a robust jobs report that fueled investor fear over possible rising interest rates.

"Unemployment [is] so low people are concerned over labor shortage. Labor shortage means wages pushed up which is good for the people working but it's going to put pressure on prices that could put pressure on the Federal Reserve to be more aggressive about raising interest rates to head off inflation," said American International College Economics Professor John Rogers. 

So what do the experts advise for people nervously looking at their 401(k)'s during this current market volatility?

 "Wait it out [until] we have a strong economy, the fundamentals are tremendous and we're going to make this back," said Corridan. 

For those people within 5 years of retiring , Brian Corridan said it's a good idea to have diversified  your portfolio with less emphasis on stocks and more focus on cash and bonds which are not subject to the volatility that stocks are subject to.

Copyright 2018 Western Mass News (Meredith Corporation). All rights reserved. 

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