SHREVEPORT, LA (KSLA) - There's been an understandably nervous reaction from many investors to this week's roller coaster on the stock market. That includes investors with 401k and other retirement accounts who fear suffering big financial losses.
The Dow suffered its largest point drop ever for a single day on Monday falling by 1,175 points. That's a 4.6 percent drop.
That may sound huge until you consider it doesn't even crack the top 20 for single day drops, including the Dow's worst dip ever during the 2008 financial crisis.
When the Dow took a dive on Monday one local investor told KSLA about his first reaction. "You know, we've been there before," recalled Kim Mitchell.
The 65-year-old retired architect is now in what he calls his encore career as director of the Center for Community Renewal. And Mitchell said he knows all about the ups and downs of the stock market.
"You know, going back to 2008's pretty good, pretty good example of don't panic," explained Mitchell.
Mitchell said he listened to his financial advisor at the time and did absolutely nothing in reaction.
"I rode it the last time and it was amazing how yes it was shocking how much the market lost but then how quickly it rebounded," added Mitchell.
Now a full decade later, Mitchell is once again taking the advice of his financial advisor Tommy Williams.
In fact, Williams said he urges his clients to invest for the long-term, not for some quick gains with higher risks involved, especially as the client gets closer to retirement.
"If you're investing to build a house this summer, you're a short-term investor. You shouldn't be in the stock market anyway," said Williams.
Williams described long-term as at least 3 to 5 years. He also cautions investors not to react emotionally to short-term events where they risk taking a loss.
"They won't be, often won't be denied their God-given right to lose money. And people will always figure out some way to lose money it seems," concluded Williams with a grin.
Williams called Monday's drop in the dow a bump in the road and in his opinion not a harbinger of things to come for nervous investors.
He described strong corporate earnings, low unemployment, and high consumer sentiment as ingredients of a strong economy.