Local expert says not to panic amid tumbling stocks

BOSTON — The stock market plummeted on Monday over fears the U.S. economy is slowing down.

And that sparked a worldwide sell-off of stocks.

“It’s very volatile there’s a lot of uncertainties,” said AJ MacDonald of Boston.

The S&P was down by 3.1%, the Dow Jones dropped 1,034 points and the Nasdaq Composite slid 3.8%.

The plunge was just the latest in a global sell-off that began last week. Japan’s Nikkei 225 helped start Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987.

That’s making young investors worried.

“Yes, I would find that very concerning especially people who are invested in the market,” said Olivia Burns of Boston.

Bentley University economics professor Dave Gulley tells Boston 25 that people should stay calm.

“I’d advise everybody to take a deep breath,” said Gulley.

He says the market drop may simply be some profit-taking.

“So far there really isn’t sufficient news to justify the decline so this could be the result of some profit taking because we’ve had a really notable run-up in equity prices,” he said.

Professor Gulley offered some tips for investors:

• Don’t panic
• Make sure you have a diverse portfolio
• This may be a good time to buy stocks

Young investors we talked to agree saying they’ll be more cautious but plan on staying in the market.

“I think investing is all about riding the highs and the lows…. And making sure your money goes up over the long term so I think it’s important not to panic in the short term and that’s how you grow your wealth by being invested,” said Burns.

US Central Bank policymakers pushed back that a weak July jobs report means the economy is headed for a recession… instead, they pointed to the need for the Fed to cut interest rates to help jumpstart the economy.

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