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Creighton, UNO economic analysts: market volatility shouldn't worry long-term investors

The U.S. stock market recovered most of its losses after dropping 1,000 points Monday morning shortly after trading opened, then ended the day down 588 points.

Business professors at UNO and Creighton say long-term investors shouldn’t panic, and the stock market will slowly recover. Mark Wohar, Distinguished Professor in the Department of Economics at UNO, says the market fluctuations shouldn’t have most people worried about their retirement accounts.

“For people that are young, it doesn’t mean a lot. Some won’t even have to worry about it because in the long run, the stock market is going to come back. For people who are older and closer to retirement, hopefully they have their portfolios allocated in a way that they may not be heavily in to stocks.”

Lee Dunham, associate professor of finance at Creighton, says the down markets could actually be an opportunity for some investors.

“The last thing you would want to do is sell some things, I would think, based on prices that are probably a little exaggerated at the downslide. So make sure you’re still properly diversified, and if you have money sitting around, maybe these are the kinds of opportunities where you can put a little of that money to work if you’ve been waiting for an opportunity, as many investors have, to get in at a lower entry point, this may be the time.”

China’s weak economic numbers are cited as one reason for the volatility in the U.S. markets. The country devalued its currency. That move was felt by markets in Japan and Europe as well.

Wohar and Dunham say it could be a few months before the Dow Jones recovers from the losses. And both say they don’t know if the Federal Reserve will stick with its plan to raise interest rates in September.