Stocks plunged on Wall Street Tuesday morning. (Photo by Scott Heins/Getty Images)
Salt Lake City, UT — Plunging stocks temporarily put a stop to trading this morning and this has people worried about their 401(k).
After stocks on Wall Street plunged seven-percent Monday morning, it triggered a mandatory trading halt for fifteen minutes.
It was the first time since the 2016 U.S. presidential election that Wall Street futures fell more than the five-percent daily limit.
Shane Stewart with Deseret Mutual Benefit Administrators points to a couple factors that are creating the plunging stocks
He says a fight among major crude-producing nations is hurting global stock markets and oil prices. Added to that, the widespread fear of COVID-19 coronavirus is also impacting the market.
“Water and oil don’t mix,” he said. “Well, in this case, it’s coronavirus and oil. They don’t mix.”
According to Stewart, many people don’t want to think about what the sharp turn means for their 401(k).
“I’m just going to close my eyes, plug my ears and wait for things to get better,” he said.
And in fact, that mindset might not be the worst idea right now.
“It doesn’t sound like a great strategy, but it’s actually the best strategy,” said Stewart. “It’s just emotionally hard to do.”
He says “ignoring” the downfall is all right in a time like this, because the market is expected to rebound. Additionally, many financial advisors believe an atmosphere like this is an opportunity to pour more resources into an account.
“We all know intuitively we should buy when it’s on sale, it’s just hard to do when markets are going down,” said Stewart.
For those scared off by the volatility, it may be an unnerving next few months. Many following the market believe Monday’s plunge may not be the end of the worst.
“I think we’re going to see more correction,” he said. “This is a correction we’ve been anticipating for a dozen years now and it’s finally happening.”