Stock market decline may not be a scare
COLUMBIA - After a dramatic day of fluctuating the Dow Jones Industrial average closed Monday afternoon with a loss of nearly 600 points. The Dow opened Monday morning and immediately dropped more than 1,000 points in nearly 10 minutes. By midday the Dow recovered more than 800 points and almost broke even but would ultimately decline again before the day's end.
The increase of selling forced the S&P 500 into correction mode for the first time since 2011 while the Dow closed at its lowest number in over a year and a half.
In comparison to steep market drops in the past, the commotion Monday was not overly alarming to one Columbia certified trust and financial accountant. Polly Reynolds, Vice President and CTFA of the Trust Company, said she believes this is the third longest bull run in market history. She said it was not an unexpected drop despite the commotion it may have caused.
"For most wealth managers, people that work with this every day, this market correction has been anticipated and is probably needed," Reynolds said.
To put it in perspective, the Dow would have had to drop nearly 3,700 points to cause as large of an issue as "Black Monday" in 1987. Similarly, the S&P 500 dropped to 1,867 at its lowest Monday, which is more than 1,000 points higher than its lowest point during the Great Recession in March of 2009 when it bottomed out at 666 points.
Reynolds said if she looks at the fundamentals and market indicators now, there is nothing that indicates a repeat of the crash in 2008 and 2009.