Today the Dow continued the selloff, closing at 24,345.75, down 1,175.21 points.
And I’m telling you – still – DO NOT PANIC.
Now, the media would have you believe that today is the biggest down day in the history of the stock market. At the time I am writing this, in fact, CNBC has preempted its regular programming to air a special live broadcast titled “Markets in Turmoil”.
In terms of total points or absolute dollar amount, today is yes, indeed, the “biggest down day”. The Dow, however, has been at an all-time high – so obviously, periodic declines are going to be larger. That’s simple math!
The percentage is the figure that matters here. The Dow was down today by 4.60%, which is far below the top 20 percentage declines in history. (The biggest was October 19, 1987 – commonly known as Black Monday – when the Dow closed at 1,738.34, down by 508 points and 22.61%.)
Again, this is very simple math to understand.
So, Janes and Joes, I implore you…please don’t react to the media hype! You know and I know that the media’s job is to sensationalize every event that happens and make mountains out of molehills.
Look, I’m not saying that these selloffs should be ignored…but I’m telling you, the worst thing you can do is to react in panic to the headlines in the media.
If you are currently holding a position in any stock, keep holding.
The Dow will continue to rise. Take a look at this chart that shows how it’s risen over history, through every type of tumultuous event imaginable.
As always, I welcome and encourage your thoughts in the comments! Please also follow me on Facebook, Twitter, Instagram, and YouTube, and check out my ebook, The Stock Market is for Everyone, on Amazon and Smashwords.
Until next time!