Local financial adviser reacts to 1,000-point stock market plung - WDRB 41 Louisville News

Local financial adviser reacts to 1,000-point stock market plunge

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LOUISVILLE, Ky. (WDRB) -- There were volatile swings on Wall Street Monday with the Dow plunging 1,000 points at the open.

It came after a historic plummet in Chinese stocks.

The Dow eventually closed down more than 588 points at 15,871. The NASDAQ closed down about 180 points at 4,526.

The Dow Jones Industrial Average has never dropped more than 800 points in one day. So as you can imagine, people across the world and right here in Louisville were on pins and needles.

Eyes glued to the television with his phone close by, Donald Wagaman was monitoring the Dow closely.

"Going up and down like a rollercoaster," he said.

After watching the Dow plummet to 1089 points Monday morning, the GE retiree instantly thought about his assets.

"Early in life I saved a lot of money," he said. "I'd saved everything I could save every year I worked there, so I had a pretty good 401K when I retired, and I had a pension when I retired, and I had other benefits when I retired."

Instead of trying to make sense of the woes of Wall Street, Wagaman decided to call his adviser.

"If you do it yourself, you're in a little bit of danger unless you're extremely wary and extremely knowledgeable of the market," Wagaman said.

Associates at Lamkin Wealth management discussed the market's current state of affairs and how to explain the plunge to clients.

"It's scaring a lot of people," said Mark Lamkin, CEO of Lamkin Wealth Management. "But as a percentage, we've been here many, many times before."

Lets put this in perspective. The stock market has plunged a lot further in the past. On Oct. 19, 1987, known as Black Friday, the Dow dropped over 22 percent. 

Twenty-two years later, during the 2008 Great Recession, the market dropped almost 7 percent.

Today, Aug. 24, the Dow dropped 6.6 percent.

Lamkin says the market has gone up a lot in the last few years, so it was due to come down a bit. 

"Right now we're only down 13 percent from the peak," he said. "We haven't had this drop in almost five years, so it's a normal part of investing. The bigger question is, do we go into recession, or is the market overvalued? In my opinion, it is not. This is just a normal pullback, not going to be the start of a bear market in my opinion. Take a step back, look at your overall plan, look at your asset allocation and ask yourself: Is the market going to be better three years from now? Five years from now? I think the answer is yes."

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