As the stock market falls, concern about the economy continues to climb. Lubbock financial advisers are reminding people to focus on their long term investments.
Monday was the first market day since our country had its S&P credit rating downgraded from AAA to AA+. The Dow fell 634 points by the time the market closed.
While some investors call it ‘wake up call,' they say not to hit the panic button just yet.
"Markets overreact because people overreact," said Lubbock financial planner Mark Bass
Bass reminds folks that other countries, like Japan, have lost their AAA status and recovered.
"When Japan lost its AAA rating, the subsequent 12 months their stock market was up," he said.
We asked another local financial advisor, Tommy Wood, about what the drop meant to our country.
"It's not a concern over the U.S. being able to meet their obligations over the short term whatsoever, but it is a little bit of a concern that long term something needs to be done," Wood said.
ABC Bank CEO David Harmon had a similar response.
"What they're saying to investors that put their money in U.S. securities is that you are a little more at risk than you were," Harmon said.
On the South Plains, local financial planners say their investors are concerned but aren't panicking.
"We've gotten calls from people who are curious and say, ‘What do you think about this?' And we get calls from clients saying, 'Gosh, wouldn't it be a good time to buy?" said Bass.
When financial uncertainty settled in 2008, bankers say more money was pulled from investments and put into banks. Harmon says that hasn't been the case so far this year.
Bass advises people to spread out their investments.
"Even though their U.S. and foreign stocks may be down, their bonds have been okay; their commodities like gold and silver are okay," Bass said.
Experts say the market is down about 15 percent from the high in May, but suggest it is an annual trend.
"Historically speaking, the market has had a 10 percent decline about once a year for about 110 years," Wood said.
While fears haven't rattled Lubbock investors yet, it's the long term that concerns everyone from bankers to brokers.
"You always should live within in your means." Harmon continued. "Living within our means is something we have not done in this country and today we're paying for it."
Financial experts say rising interest rates are one of the biggest concerns. Stay with KCBD.com for the very latest.
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