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Stock market analyst: “we will ride out this downturn”

After a remarkably volatile week on Wall Street, everyday investors are feeling antsy. After all, the Dow Jones Average plunged 800 points in one day! Is it time to pull your money out?

Not yet, says Yahoo! Finance anchor Adam Shapiro. On this week’s episode of Money Making Sense, I spoke with Shapiro about volatility, recession indicators, and making financial decisions in a crisis. As Shapiro said, “breathe deep, take a deep breath, and let’s begin to unravel this.”

When I asked Shapiro if I should be fleeing the market right now, his answer was measured.

“You have to answer that question depending on how old you are, when do you need the money that you have tied up in the stock market, and what is the goal of all this?” He said. “The simple answer is if you’re under 60 years of age right now, we will ride out this downturn. We always come back. Everything goes up, everything goes down, and then everything comes back again. So we have time to ride this downturn.”

If you’re over 60, Shapiro said, it’s time to speak with your financial advisor and consider your short- and long-term financial circumstances and goals.

“But remember, if you get out of the market today, you’re selling in a downturn,” he cautioned. “If you can ride this out for a couple of years, you’re going to do better, despite where we’re headed right now. You’re going to do better in the long run than if you sell today.”

When asked about the sharp drop in the Dow Jones Average, Shapiro cautioned listeners to consider percentage drops rather than point drops, and to remember that the stock market is a poor indicator of potential recessions.

“It all sounds very scary when you just throw numbers at people, but … each of us has lived through now some pretty severe downs and some pretty high ups. We’ve all been through this before,” Shapiro said. “So that’s the lesson: you don’t want to make a quick call without understanding why you’re doing it and what the ultimate goal is.”

You can listen to Money Making Sense on Apple Podcasts, Libsyn, Stitcher and other podcast platforms.