DOW sees historic single-day drop; experts say it's not the time to panic

(MGN Online)

It's the largest single-day point drop (1,175 points) the Dow Jones has ever seen- erasing its gains for 2018 on Monday.

“Citizens should be concerned about what the federal reserve system is going to go with interest rates because we're affected by interest rates whether for an automobile or a mortgage,” said Pat Raines, the Dean of Economics at Belmont University.

Raines said the selloff seen in the last week is the result of fear, fear that there will be inflation in the future and that corporate profits will be affected, and that people will be paying more for mortgages and credit cards and everything they buy.

“It's hard to predict that that's exactly going to happen in the future," Raines said. "In fact, investors should, you would think, be happy about lower tax rates on corporations and how that's had a positive effect on their bottom line."

Brock Kidd is the founding partner with Pinnacle Asset Management. He said the worst time to panic is during times like this.

”One of the reasons that we think the stock market sold off is because of interest rates rising pretty rapidly in a short period of time,” Brock said. “For folks not involved in the stock market, this really shouldn't have much of an impact. We had this big tax bill that went through that will be rest for the average consumer, and that's why we think the ramifications of the stock market won't be as bad as they appear today."

Raines said despite the crazy drop, he thinks it will turn out okay.

This is a long anticipated correction in the market," Raines said. "I think that as long as growth continues, and inflation doesn't take off too rapidly, then we should be okay."

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