At the end of the first month of the year, the Dow Jones dropped nearly 1,000. After experiencing so many highs in 2013, many investors are shocked and concerned over the change. Wes Moss recently stopped by CNN to give some details on the big drop.
Below are transcript’s from Wes Moss’s CNN Interview on the big Dow Jones drop in January. See the full transcripts from the interview on CNN.
WHITFIELD: Oh, just a little friendly advice. You may not want to check your retirement account today. The Dow had its worst January in five years, and that was right after the financial collapse. The Dow dropped another 150 points yesterday, ouch, and nearly 1,000 points in January altogether. So we’re going to bring out the crystal ball now with our financial expert Wes Moss, a certified financial planner. Good to see you.
WES MOSS, CERTIFIED FINANCIAL PLANNER: Good to see you.
WHITFIELD: So many have said there was going to be a correction. Is this it?
MOSS: We are in the midst of one right now. So the Dow Jones now is down about 5.5 percent. The S&P 500, which is really the measure that we should be looking at, is only down about 3.5.
So as scary as this has been, it’s really not that bad, at least just yet.
WHITFIELD: So there’s room for it to dip even further you’re saying?
MOSS: There’s lots of room. At this point, there’s lots of room.
WHITFIELD: So how do we look at this and perhaps detect we might be on the verge of a climb before we take another dip or the other way around?
MOSS: I think part of why you hear a lot of Wall Street expecting a correction, one, we had a great year last year, 30-plus percent on the S&P 500. That’s rare.
WHITFIELD: People were so happy. They felt like there was a giant rebound, a recovery of their losses. MOSS: And there has been. Markets are up almost 150 percent since the very bottom way back in March of 2009. What happens is investors can get lulled to sleep a little bit. We’ve had great years back-to- back-to-back. But we typically have corrections of five percent at least every ten weeks. We went 30 weeks without one. We have 10 percent corrections every 32 weeks. We are two-and-a-half years since that. So we’ve got — we really have had a nice run in the market without a huge amount of bumps, and to have one today where we’re down five percent over the next week or two, maybe 10 percent, wouldn’t be out of the question.
WHITFIELD: So what do you best advise now? After hearing this segment, I’m sure people will look and say, I’ve got to check and see where I am? How do they change investments? Do you want to make a move at this point, shifting priorities, or just wait?
MOSS: Investors tend to get very, very nervous, because markets take a long steady climb typically, then they drop quickly. So as soon as it drops quickly, you get nervous.
What investors need to do right now, if you’re under the age of 60, let’s say, you want to have these drops, because you’re still saving. In your 30s, 40s, 50s, you’re still putting money into 401(k) typically every couple of weeks for most investors. We want markets to pull back. So it’s not a time to panic. It’s time to really almost accelerate. Every time there’s a drop it’s good news for investors that aren’t yet retired.
WHITFIELD: If you’re over 60, then?
MOSS: Over 60 you really need to have a balance to begin with. So most investors who are in retirement, 60-plus, are not going to be completely exposed to the stock market anyway.
WHITFIELD: All right, Wes Moss, should we be optimistic? Sounds like you are?
MOSS: I’m very optimistic. The economy recovered. Not come back to where we were before the great recession, but the economy is in good shape, it’s getting better, and we’ll going to continue to see that with economic news throughout this year.
WHITFIELD: We like that optimism. Thank you so much.
MOSS: Good to be here.
WHITFIELD: And happy Super Bowl weekend. Have fun tomorrow.
MOSS: You as well.
WHITFIELD: Thank you.