Stock Market Now In A Correction

Barbara Schwarz
February 28, 2020 - 6:30 am
AP New York Stock Exchange

(AP Photo/Richard Drew, File)

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It has fallen more than ten percent this week alone. The Dow plunged 1191 points Thursday, marking the worst one day point drop ever. 

Julie Lambert, branch manager with Charles Schwab's Plano office says this downturn is centered on the corona virus, the impact its having on global supply chains and global economic growth.   She says it's a good time to focus on diversification and rebalancing."

"Resist the urge to sell based solely on recent market movements. We know that staying the course is so difficult emotionally, but taking a long view is healthier for your portfolio."  

She says markets typically go up and down. "You're likely to experience several long declines during your long investing career. Timing it is nearly impossible. We recommend don't sell stocks when markets drop because it can make your temporary losses permanent."

She says many people look at this as a buying opportunity. "Some investors learn on the opposite side that they aren't quite as willing as they thought they were to face a sharp drop in their portfolios."

She says investors should consider defensive assets like cash and bonds.

Lambert believes quantitative easing is coming in the form of lower interest rates to make the system more liquid.