Palm Desert, CA
Monday in the span of about ten minutes the stock market took a violent turn.
"I looked up and the market was down about 900 points, I looked back up a few seconds later it was down about 1200 points, I looked up a few seconds later it was down only 800 points, significant swings," says Ryan Wilson, Senior Vice President of RBC Wealth Management in Palm Desert.
At its lowest, the DOW was down 1600 points, but at close it was down 1175, the largest one day drop in history.
"Definitely a historic volatile day, it was two days in a row of severe volatility, so certainly I would say a signal for people to wake up, look around and see what they’ve got going on in their portfolios," says Wilson.
While it caught Wilson’s eye, he says days like today aren’t time to panic but time to reassess.
"The main advice would be to not necessarily act on any emotions on a day like today … at the very least open up your monthly statement … and say you know how are we doing?" adding that those who manage their own investments should take a close look at what they’re doing and use the resources available through your work 401 (k) like online tools, or phone services.
He says it’s also a good idea to get a bi-yearly analysis of your investments with a financial planner, "They will sit down and say hey, here’s a simple financial plan, here’s how you currently sit, this is what I think you should do on a one time basis … if you do do things on your own, it’s certainly something you should be doing probably twice a year."
Wilson says Monday’s losses set the market back to the first of the year, so if you’re in what he calls the red zone or five years out from retirement or five years in, you should not waste time to re-evaluate your investment plan, "Those are time frames where you really can’t afford to take a significant market loss, maybe treat today like it was January first, right, set our your financial resolution and say where are we sitting, how did we do last year and what should we be doing on a go forward."
And good advice for everyone, especially those well into retirement, he says, "This isn’t just a cruise control situation you definitely have to make sure you you have the right risk in place for what you’re trying to achieve and that you’re paying attention."
Despite the roller coaster ride, he says the economy is strong, "Quite honestly even though we’ve had two down days significant down days, I don’t want to discredit it but there isn’t anything fundamentally about this economy that tell us here at RBC that things are negative."
While it is the largest point drop in history, the DOW lost 4.6 %, small when compared to the nearly 13 % drop in 1987, and nearly 23 % drop in the infamous crash of 1929.