A month has gone by since the Dow Jones industrial average dropped 1,000 points and ended the day with nearly a 600 point loss. The stock market is slowly regaining strength and stability, but is far from a full recovery.
The Dow Jones dip last month was the largest loss the United States has seen since Aug. 2011, when the stock market dropped 634.76 points.
“Dips in the market are regular and they are really good buying opportunities,” said Joel Carignan, financial advisor at Edward Jones in Stockton.
Following the August plunge, oil prices dropped to under $40 a barrel.
Since then, crude oil prices have averaged close to $46.90 a barrel.
The Federal Reserve’s meeting last week where it decided not to hike interest rates caused oil to have its biggest daily drop of the month. Oil prices dropped $2 on Sept. 17.
The Fed has upcoming meetings in October and December. Wall Street professionals anticipate they will hike rates later in the year.
Cheap gas is a positive for American drivers but it is a scare for investors who are involved with companies that rely on oil sales.
The actual dollar amount of gas, rather than the reason behind the frequent changes in gas prices, is more important to the average American.
“I’m more generous with my spending when gas prices are low. When I eat out for lunch, I’m going to grab BJ’s instead of McDonald’s,” said Johnny Leonardo, Delta College student.
People tend to use the term “crash” whenever there is a major market drop. These drops aren’t all crashes. They are normal and necessary for proper market run.
Stocks can’t just go up. There needs to be a risk and an unknown of what’s going to happen next.
“We might wake up in the morning and big companies like GM and Chevron might have gone bankrupt. There’s definitely some some risk involved, that’s why there is a reward,” said Carignan.
When a dramatic drop occurs, investors and buyers act as if there is a clearance sale going on when purchasing stocks. It’s as if they can purchase a Cadillac for the price of a used Honda.
What does this mean for college students today who bear an interest in investing post-graduation?
Millennials are the largest part of the U.S. workforce right now, representing nearly a third of the total population.
They are the future of Wall Street.
When ready to invest, there are many factors they have to consider. Financial advisors suggest that all debt like student loans and car payments are paid off and a stable savings are set up before any step towards investing is taken.
“Younger investors will have plenty of time to ride out the ups and downs of any market,” said Denny Baish, a senior investment analyst at Fort Pitt Capital Group in Pittsburgh in an interview with Jeff Reeves from USA Today.