WTVM Editorial 1/8/16: Stock market panic - WTVM.com-Columbus, GA News Weather & Sports

WTVM Editorial 1/8/16: Stock market panic

(Source: WTVM) (Source: WTVM)

COLUMBUS, GA (WTVM)) - It's easy to think the sky is falling when we hear news reports about the plunge in the stock market just in the few days since 2016 arrived.

The market sell-off was brought about this time, or at least blamed on, a slowdown in Chinese manufacturing.

That kind of roller coaster market can seem too scary for regular investors, so many just sell everything and head for the hills.

But it's important to remember not to panic when the financial markets take a tumble. It's happened before, and experts consistently remind us we have always recovered. There was the so called "Black Monday" nosedive in 1987.

Stocks took a beating after the Sept. 11 terror attacks, and there was the meltdown in 2008 following the banking crisis.

More recently, stocks tumbled during an economic crisis in Greece. In each case the market did bounce back. However, in times like these, financial experts tell us to stay the course, especially when it comes to pension plans or 401-K contributions.

Because if your company matches even a small percentage of your 401k contributions, that's free money.

Also, contributions to your 401-K reduce your taxes now because that money is tax deferred: you don't pay taxes on it until you withdraw it in your retirement years.

Of course, it's always smart to only take investment risks you personally can tolerate, something to remember when you decide what to invest your 401k in, whether it's an aggressive fund or a very conservative one.

And there's something else to remember about those news reports on the wild ups and downs on Wall Street: there is never really just one cause.

In truth, the financial markets are complex and interconnected, but that's also why they rebound. Diversifying your investments is the same principle.

Never put all your eggs in one basket even when the market comes back up; and history says it will.

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General Manager Holly Steuart brings two editorials a week to WTVM. If you would like to respond to an editorial, e-mail your response to WTVM Editorial Committee or write to:

WTVM Editorial Committee
1909 Wynnton Road
Columbus, GA 31906

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