WASHINGTON 鈥� The market plunge that began on Friday and is continuing into Monday could easily tempt an investor to panic. But CBS news business analyst Jill Schlesinger tells 草莓传媒 that panic is exactly what got this started. She says it鈥檚 time to keep calm and look at the upside. Yes, there is one.
Schlesinger said on Monday morning that the economic slowdown in China, the world鈥檚 second-largest economy, created a 鈥渇ear factor,鈥� leading to a sell-off. She adds that the stock market had been riding high for a long time.
鈥淚t鈥檚 been almost four years since we had a correction,鈥� Schlesinger says.
A correction is defined as a decline of 10 percent from the recent high.
鈥淲e usually get corrections about once every year.鈥�
Schlesinger said a combination of factors are contributing.
鈥淚 think there was a sense of 鈥楪lobal growth is going down; the Fed鈥檚 gonna raise interest rates; now we鈥檙e worried about this; we haven鈥檛 had a correction 鈥� sell, Mortimer, sell!鈥�,鈥� Schlesinger joked, referring to a line from the movie 鈥淭rading Places.鈥�
She counsels caution and calm.
鈥淢arkets overshoot, both up and down,鈥� she says, adding that the market had overshot to the upside recently.
鈥淲e had these companies climbing and climbing, even as companies were telling us that their earnings were slowing down.鈥�
She says that investors often show 鈥渆uphoria on the way up鈥� and 鈥渇ear on the way down,鈥� and says you need to hold tight.
鈥淵our job in the next days ahead is to battle that little devil on your shoulder and say, 鈥楪et out of here; I鈥檓 not gonna do anything. I鈥檓 hanging tough with my game plan; I鈥檝e seen this before.鈥欌��
It鈥檚 not even a bad thing in the long term, she says. If you鈥檙e roughly 45 years old and contributing to a retirement account such as a 401(k) or 403 (b), 鈥淵ou鈥檙e happy today,鈥� Schlesinger says.
It鈥檚 easy to forget that your fund is still buying, and a situation like today鈥檚 means you can buy 鈥渁t levels we haven鈥檛 seen in 15 months.鈥�
Schlesinger concedes that, as a former trader, 鈥淚 get a little excited on the down days鈥� and that 鈥淚 know it鈥檚 uncomfortable.鈥�
鈥淭his thing we call investing 鈥� it鈥檚 not a sport; it鈥檚 not an avocation. It鈥檚 something to take seriously and it always has risks. Sometimes we forget about that.鈥�
