A bad week got worse Thursday as the stock market continued its free-fall over the coronavirus. The Dow Jones Industrial average plunged 1,191 points, the worst one day drop ever.
As stock prices fall, anxiety rises.
“Nobody really knows how it’s going to impact our economy. It just brings anxiety to everyone," said Violeta Diaz, Ph.D., associate professor of finance at Saint Mary’s University’s Greehey School of Business.
Thursday was a volatile day for the markets, riding a roller coaster as companies would announce lower expected earnings. Among those hard hit -- Boeing, Apple and Visa as concerns swelled that consumers will travel and spend less.
For the week, the Dow gave up more than 3,000 points and entered correction territory.
“This is not 2008,” Diaz said. Unlike the crisis of a decade ago, she pointed out this one is caused by an external event.
“It’s temporary. We don’t know how long it’s going to last, but we know it’s not anything internal," she said. “The economy is strong, and I think we can find some comfort in that.”
Average investors with company 401Ks are taking a hit. But for most investors, there will be time to recover, Diaz said.
“If you have a diversified portfolio, you should be okay,” she said.
The general advice from portfolio managers is to stay calm. But if the week has raised your anxiety level, assess your risk tolerance and plan accordingly.