August 8, 2011
President Barack Obama says the United States will always be a AAA country despite being downgraded to an AA+ credit rating by Standard & Poor's. But his assurance did not seem to help Monday, as the Dow Jones Industrial Average ended the day down more than 600 points.
Locally, financial analysts tell CBS19 the news isn't all bad. They say Friday's credit rating downgrade was expected and therefore should have been prepared for. The silver lining? It's a good time to invest, and with time they expect the market to balance out.
“The stock market is very quick at reacting to bad news, but it takes further bad news to push it lower,” said David Marotta, of Marotta Wealth Management.
Still, Monday's significant drop has caused concern. A small portion of investors are considering getting out of the market and into what they think are “safer options”, like gold. Others are transitioning from stocks to cash and savings options.
Marotta says the best advice he can give is not to panic.
“One of the jobs of a financial adviser is to keep people from doing things that feel like the emotionally right thing to do but statistically are the wrong thing to do,” he explained. “Generally after a drop like this, selling is one of the worst things you can do. So sometimes we have to talk clients down off the ledge.”
Glen Rust, President & CEO of Virginia National Bank, agrees. People have been calling him asking about the market, but he says only time will tell.
“We'll see what tomorrow brings. That's the biggest question,” he said.