LAS VEGAS (KLAS) — The stock market took a hit this week, with the S&P 500 dropping more than 6% Monday and Tuesday, marking the biggest two-day loss since 2015. The drop came as worries rose over the spread of the coronavirus outside of China.
8 News Now spoke with a local financial expert who helped put the stock market situation into perspective.
When the stock market falls, there’s a natural desire to search for an explanation. In some cases, it can even cause panic.
But experts said this is a normal part of a healthy market environment and to keep your focus long-term.
The coronavirus fears triggered the fall this week, but outbreaks are nothing new, either. We saw a drop in 2003 when SARS caused world-wide apprehension. In 2015 and 2016, the Zika virus outbreak caused the market to drop nearly 13%.
Andrew Whalen, CEO of Whalen Financial, said to put that into context, on average, the market drops about 10% or greater one to two times a year.
“There’s always going to be something, whether it was Iran earlier this year, or Chinese tariff war last year,” said Whalen. “What makes this a little bit more unique is the mass information we’re seeing allows us to absorb it a lot faster.”
Whalen said seeing the change is unsettling and that it’s not easy for clients or investors to see statements or go online. However, he noted it’s all part of a “healthy market environment.”
He also added that any kind of lost production we do see in the first half of this year is more than likely to be made up toward the end of the year.
If you’re still worried, talk to someone with more experience and keep in mind: stocks don’t make you wealthy. Instead, it’s your behavior around stocks that give you the opportunity to create wealth.