Where's the Bottom? Skittish Investors Hope for End
Investors are asking "where's the bottom?" after six straight days of heavy losses on Wall Street.
Tuesday brought another roller coaster ride, as U.S. stocks were up much of the day before plunging into negative territory by the closing bell.
But experts say there's no need to panic.
"This is the worst possible time to be selling your stocks," explained CBN News contributing economist Stephen Moore.
Moore said investors who ditch stocks right now could only end up hurting themselves more.
"There's an old saying in the stock market, the old adage that goes back 200 years. You want to buy low and sell high, so when people get panicked -- and they often do during these kinds of meltdowns like we've seen in the market in the last couple of weeks -- people start to sell their stocks when the stocks are low," he said.
Moore said stocks could still go lower, but they will eventually bounce back.
Others agree that the big drops over the last six days are part of a natural cycle in stock markets.
"The average investor should realize that the market over the last couple of days is behaving as the market typically does. The issue is we just haven't seen this kind of volatility for some time, so really what has been happening in the market is dramatic; it feels scary to some," said Rhonda Schaffler, editor at large at TheStreet.com.
"The headlines look nasty," she continued. "But markets go up and down and we've been in a period that has been absent of volatility for so long that many investors have forgotten that this is what it's like."
CBN News Financial Editor Drew Parkhill agrees, pointing out the U.S. markets have not seen a correction in nearly four years, so they were overdue for a pullback.
Still, as China's economy slows down, some wonder about the long-term impact on the U.S. economy.
Hoping to put an end to their plunging stock values, China has cut a key interest rate again and announced other steps to inject capital into the market. But the losses continued Wednesday in Shanghai.
China's main stock market index has plummeted more than 40 percent since early June.
And although U.S. stocks could be on track for the worst overall drop since 2008, the American economy is still looking healthy.
"If you look at American companies today, I think they're pretty healthy. I think they're profitable. They're lean and efficient. So I don't think there's a reason to be panicked about a sustained bear market right now," Moore said.
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