Local Experts Weigh In On Wall Street’s Tumble

Tuesday, February 27th 2007, 8:36 pm
By: News On 6

Four hundred sixteen points. That's how far the Dow tumbled on Tuesday in its seventh-largest point decline ever. Fears that the economy is slowing both at home and abroad also shook the NASDAQ and the S&P 500. The stock market slide may have some investors a little jumpy, but the News on 6’s Ashli Sims reports local experts are advising caution.

After the days market news your head may be ringing. Chinese markets took its biggest hit in a decade, which seemed to trigger the Dow's downfall. But what does it all mean for the average investor? David Healey with UBS says not much.

"What has changed fundamentally? Well not a whole lot. Do you think they're going to close a bunch of Wal-Marts tomorrow because of this? I don't think so. Do you think American Airlines is gonna quit flying tomorrow? I don’t think so," he said.

Healey says a 400-point plunge may seem huge, but its all part of the roller coaster ride that is Wall Street.

"Use long term thinking and you'll ride through these things just fine,” Healey said. “And in some cases you might even be up. Because if you're in bonds today, some of your bond portfolios may be up."

Another upside, Healey says investors with extra money should cash in on a bargain.

"Basically what you have today is the old K-Mart blue light special on the Dow,” he said. “It’s a chance to get in at a price lower than you can get in at a couple of weeks ago."

How long this market blip will last is anyone's guess. But Healey says for the right kind of investor the stock market frenzy shouldn't be cause for concern.

"If you're a long term investor and properly diversified, this is a great thing," Healey said.

Now everyone's comparing Tuesday’s plunge to the days after 9/11, but lets put it in perspective, we did some checking and found that after 9/11 stocks fell more than 680 points, several hundred more than Tuesday’s fall. More importantly it was a bigger chunk of the market in 2001, seven-percent versus only a three-percent drop on Tuesday.