Stock market down as of late; experts say you shouldn’t worry
Wall Street has lost some steam since hitting a new record high earlier this year, which has led some to wonder how safe your money is. The Dow Jones Industrial Index has lost 4.5% over the last month (nearly 1,000 points). Are we headed for a repeat of the 2008 recession? KTRH Money Man Pat Shinn says you shouldn't get concerned yet.
“Typically after the stock market hits a new high it’s exhausted and it needs to catch its breath. A pullback of 5 to 10% is expected. It would be welcomed,” Shinn said.
But there are those that are worried since the Fed might pull back a bit on simulating the economy by buying bonds. Shinn says it’s not happening so soon.
“They will keep rates at effectively zero until unemployment down all the way down to 6.5%,” Shinn told KTRH.
Right now unemployment is 7.4%. Even though the Fed hasn’t pulled back yet, Shinn says the prospect of it is having an impact.
“That has caused longer term interest rates to start moving up,” Shinn said.
So should you worry about your 401k?
“If you think the big companies in the United States are going to be making big money a year from now than you still want stock exposure in your 401k,” Shinn explained.
Some say the warning the signs are there; that we could have a financial crisis like the one we had in 2008. So will that happen?
“I don’t expect for a second that we will see a repeat of what we saw in 2008,” Shinn stated.
In other words, Shinn says don't lose sleep over it. Not yet anyway.