What market woes mean for your 401K, interest rates

NEW HAVEN, Conn. (WTNH) — It was a jaw-dropping day on Wall Street Monday, as the Dow Jones plunged nearly 1,600 points in the worst single day point decline in history.

Paul Schatz, President of Heritage Capital LLC, says the sticker shock is worse than what this means for your bottom line.

“People are more freaked out now because they see the large numbers,” Schatz told News 8.  “I think this is a short-term panic and not anything that’s going to impact the economy for at least the next 6 to 9 months.”

As for why we saw the drop? Schatz says the last 24 months were the least volatile in market history, with a growing national and global economy, wage increases and rock bottom interest rates.

“The market is a little bit scared about interest rates, the market is a little scared about wage growth,” Schatz continued.  “Historically this is all very normal. I’m going to put quotes around “healthy and routine” because nobody feels healthy and routine when you live through it.”

Mel Twiest says he’s not overly concerned, but says it certainly doesn’t feel good seeing the numbers.

“It’s not pleasant, but what goes up comes down and nobody complained when it went up in such a spectacular and really ridiculous way,” Twiest said.

Imran Kassam says this is just what the market does.

“Volatility is just part of what happens and I think over the next few months everything with even out and another cycle will begin,” Kassam added.

As for your investments and 401K, Schatz says don’t do anything rash.

“The average 401K investor should do absolutely nothing,” Schatz said.  “Don’t compound a problem with a problem and emotionally panic-sell then look back and see the market is back and say ‘what to do now.'”

As for interest rates, they’re expected to rise.

“If you’re going to borrow money for a car or borrow money on your credit card, those interest rates are going to go up and remain that way until at least the other side of the recession,” Schatz continued.

Financial experts say they expect stocks to bounce around volatily for the next two to four weeks before settling down and evening out. Schatz says we could see all-time highs by the second quarter of 2018.

 

WTNH NEWS8 provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others. If you see an inappropriate comment, please flag it for our moderators to review. Also, you can now block any inappropriate user by simple selecting the drop down menu on the right of any comment and selection "Block User" from there.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s