The outcome of the stock market and economy as a whole was in question, last week. The Dow Jones closed on Monday down 1,175 points on the day.
For perspective, September 29, 2008, which started the recession, dropped 777 points. The stock market rebounded quickly to avoid any serious losses, but several stocks were sold in an attempt to save investments.
This drop halts nearly ten years of uninterrupted growth in the stock market, but according to John Wasik, contributor at Forbes.com, “The market was overdue for a sell-off.”
Market Watch is calling this event a market "correction," rather than a market crash. This happens when several stocks and portfolios are cashed in all at the same time, leading to a large drop on the stock reports.
This event has led several people to become worried about their 401(k)’s and investment portfolios, but most analysts say now is not the time to sell off anything.
Investor’s Business Daily suggests that investors “Don't fight the stock market. Most stocks move with the market, so a correction is a time to sell stocks and move to the sidelines.”
In layman’s terms: If you aren’t selling anything, you aren’t losing money. Watch this space for updates on the current economic situation.