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Analysts: Dow Plunge Not Cause For Panic, Yet

Author: Dana Kozlov

(CBS) – Monday’s stock market plunge comes on the heels of a big drop Friday.

It wasn’t a dip. It was a dive.

When trading ended, the Dow Jones had dropped more than 1,100 points.

The drop, combined with Friday’s 600-plus decline, equals a 7 percent loss for the Dow.

So, why is it happening?

“The concern seems to be about inflation getting higher and that higher inflation means the Federal Reserve will raise interest rates,” says Morningstar.com Editor Jeremy Glaser.

That could slow the economy. But Glaser, like other experts, says perspective is key.

The market is still way up since it began its climb almost nine years ago.

“It’s not a sign the economy is falling apart. It’s not a sign that there should be panic,” Glaser says.

And it’s nothing like Black Monday, 1987’s 25 percent market drop, or the crash 10 years ago.  What it does mean for the 54 percent of Americans invested in the stock market is they may want to stop and re-evaluate investments, opting for safer vehicles.

“If you need your money within a year, get that money out of risk assets. It never should have been there to begin with,” says CBS News Business Analyst Jill Schlesinger.

 

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