PHOENIX — It was a strong end to a wild week on Wall Street Friday. But with the stock market on a rollercoaster ride over the past few weeks, investors might be wondering what to do to protect their nest eggs, IRA or 401ks.
Looking back a week ago, U.S. stocks started in the red, with the Dow dropping more than 1,000 points.
It dropped 800 points the next day before coming back up to a loss of 66 points.
Inflation, geopolitical issues and COVID-19 are all reasons experts say could be to blame.
“The market is like swinging your kid on the swing… it goes forward, it goes back,” said Angelica Prescod, a financial advisor at Edward Jones.
She said while the recent volatility has had some investors concerned, there’s no need to panic.
“When it goes back, you don’t all of the sudden run away from your child,” she said. “You stand in place and you do exactly the correct action to let that child ride forward and that joyous kick they’re going to do in a couple of seconds after you push them forward.”
Prescod said during a time like this, that’s the same way you should approach your investments.
“Same thing with the market, it’s cyclical,” she said. “As we expected a phenomenal year happened in 2021, what happens after you swing out and do really, really well, it has a little pullback.
"So 10% down feels uncomfortable, but it’s actually quite normal and it’s a normal correction that we should expect and we don’t expect this correction in this huge depression because we still have a strong economy.”
While Prescod doesn’t predict the Fed-driven volatility is over, she said making sound decisions based on your goals is key.
The bottom line is when the market takes a dive? Stay the course.
“Take that opportunity to seize opportunities that will benefit you long term,” Prescod said. “Inflation is not a problem. Inflation is an opportunity. Down swings in the market are not a problem.”
So don’t make any drastic move due to the recent volatility, but rather, as Angelica said, make your moves make sense.
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