Stock market roller coaster impacts central Illinois
SPRINGFIELD, Ill. (WICS) —
U.S. stock markets made history the first week of February, with the Dow Jones average taking two major plunges.
The first was on Monday, the market took a nosedive of nearly 1,200 points.
Then Thursday, it dropped more than 1,000 points.
"We've been preparing our clients for a long time saying we were due for a correction, which is a key part of investing," explained Kevin Frontone a financial advisor for Edward Jones.
A correction is when a stock drops at least 10 percent from its peak, which is what happened Monday.
“A move of that amount is not quite as big as you may think. It's just the number of points, but if you look at the percentage it's well in line with corrections in the past," explained Frontone.
He said the major drop was long overdue.
“It's been a period of very low volatility for the last two years so it's probably a bit of a shock to the system to have this happen but it's part of a healthy, very stable stock market," said Frontone.
Gary Kessler has been investing for three and a half decades.
He said this market dip isn't a big deal.
"You just have to be a little patient and not go, 'Oh my God the world's falling, I better run and cash this in,' It's the worst thing to do," explained Kessler.
Some investors said this is a time to stock up.
“The good news is every correction in history has ended with the stock market hitting a new all-time high," said Frontone.
Financial analysts said the reasons for the drop are actually positive.
It’s related to historically low unemployment rates and rising wages.