KINGSTON, Pa. — The stock market opened this week in the red with the Dow's biggest one-day drop in 12 years. That might cause concern for investors. Financial planners in Luzerne County say the negative numbers are all because of uncertainty created by the spread of the coronavirus.
"An event like this coronavirus which is happening right now is uncertainty, and that creates selling, so when you have more sellers than buyers, you will see a big downdraft in prices. That's what's happening right now," said certified financial planner Peter Shelp.
Shelp is a certified financial planner with the Kingston Retirement Group. He says it makes sense for the coronavirus to cause some stocks to be down, like stock in travel companies, but there isn't a reason for the entire market to fall, and that's the definition of panic selling when we see everything go down in one trading day.
Shelp says because of the numbers on Monday morning, people tend to impulsively call their brokers and sell all their stocks, but that's not a good idea.
"The question is, is this going to be a sustained decline, or is it a temporary decline. So most of the economic numbers that we see are telling us that this is temporary."
Shelp says whether you have just entered the stock market or are dependent on your 401K for your income, it's best to ride this out and not sell all your stocks and purchase bonds at high prices. It's best to follow your financial planners' advice.
"Most will have a portfolio that contains both stocks and bonds, so what we're talking about today is stocks. Stocks are falling, but bonds aren't, so most investors will have a balanced approach."
Everyone's portfolio is different. For specific questions about your investments, you should contact your own financial planner or advisor, but the message Newswatch 16 received from those managing retirement funds for people in Luzerne County was to ride this out and don't panic.