Midstate stock market advisor urges calm in wake of massive Dow sell-off
Bob Caplan Interview
HARRISBURG, PA. (WHTM) – It’s the Dow Jones Industrial Average’s worst day in four years. After plummeting more than 1,000 points within minutes of the opening bell Monday morning, the Dow was still down nearly 600 points when it closed.
Concerns about China’s slowing economy, their currency devaluation, and sliding oil prices helped prompt the global sell-off.
It’s far from child’s play figuring out the stock market, but with such a turbulent day on Wall Street, millions are trying to do just that.
The Dow started at 9:30 Monday morning just a hair under 16,500 points. Five minutes later, it fell more than a thousand points lower.
Ten minutes after that, at 9:45 a.m., the market made back half those points, and forty minutes after that, at 10:25, it made back nearly 300 more.
By 1:10 Monday afternoon, the index was within 115 points of where it started.
“My belief is, and my whole way of looking at the market, is really not to panic,” said Bob Caplan of Harrisburg’s River Wealth Advisors.
Simply put, Caplan invests people’s money for them. He admitted at first, the massive sell-off rattled him a little, but he’s come to expect this kind of volatility.
“The people that are going to lose in this,” he said, “are the ones that panic and sell out and never know when to get back in.”
Caplan said the market has done “remarkably well” over the last few years. It was due for this kind of correction.
For those worried about their 401(k)s, he said don’t worry. The lifestyle funds common to those plans are generally well-diversified.
And for investors, think long-term — five years, not five days. It’s also a good time to consider diversifying portfolios even more, to gain more stability.
For non-investors, Caplan said, this is a good time to get into the market.
“It’s a much better opportunity than it was a week and a half ago,” he said with a laugh. “That’s for sure.”
Back to the numbers: The gains didn’t stick. By 3:30 p.m., the Dow was down by nearly 650 points.
And after a last-gasp gain five minutes before the close, the Dow ended trading 588 points lower than where it started.
It’s a volatile business, with few certainties.
“The thing that is for sure is that we really don’t know what way the market is going to move tomorrow,” Caplan said.
The situation in China, he said, is up to China to solve. Their market is fairly self-contained, so any corrections they need to make could happen within weeks to help stabilize the world economy.
In the end, Caplan predicts the year will still end on a positive note for investors and non-investors alike.