Transcript of Video:
Anchor: Right now at 5 another big drop in the stock market today. The Dow Jones industrial average saw its worst drop in 3 months. So far, the farther we get into 2016 the farther the stock markets fall.
Anchor: KCCI’s Shaina Humphries explains what’s to blame and how it could affect you.
Reporter: It’s a scary time for stocks. The 2016 super sell off continues after China’s stock market crashed 7%.
Kurt Pearson: There’s all kinds of speculation that they could be in for a credit crisis similar to what we had here in the US back in 2008.
Reporter: Now China’s impact is not the only thing driving the markets down. You know these low gas prices we’ve been enjoying for quite a while now? Well that’s been happening because the cost of oil is very low. And that cheap energy is making markets tumble even more.
Kurt Pearson: The companies that have depended upon revenues from the energy industry are now beginning to see some of those revenues drop because of what’s happening with oil prices.
Reporter: Though indexes are falling at a worrisome rate, they’re still not that far from their record level highs.
Kurt Pearson: So whenever you have a market that is this close to its all time high, you should be very cautious and stay on top of it very closely if you’re going to need your money soon.
Reporter: Because it’s always a cycle and in this one it may be time to check your 401K and other investments to see how exposed they are to see how exposed they are to US and international markets.
Kurt Pearson: The average person ought to really check to see what their exact returns were for 2015, how they are allocated, and are they comfortable with that level of allocation if we get another 5-10% drop from here.
Reporter: If not, it may be time to make some adjustments. Shaina Humphries, KCCI 8 News, Iowa’s news leader.
Anchor: In a look at the other markets today, the NASDAQ was down 146, the S&P fell by 47.
Anchor: Wallstreet continues to fall. The Dow Jones, the NASDAQ, and the S&P 500 were all down again today. Stock analysts say that the drop is not due to economic problems in the United States, it’s in fact due to fears that China’s economy has started to seriously slow down. The tumbling stocks are now setting records. The Dow who’s had its worst start to a year in a quarter century. There’s no need to panic but Kurt Pearson of Compass Financial says that it is time to take a good hard look at your investments to find out how exposed they are to volatility in the US and international markets.
Kurt Pearson: Everything works in a cycle, right? So the Stock Market has had several years that have been positive. We haven’t had significant volatility for quite a while. So now to experience 3, 4, 500 point moves in one day is pretty significant volatility. And that leaves every investor a little bit on edge.
Anchor: Pearson also says there’s a lot of fear out there right now, but we may just wade right through this if 4th quarter corporate earnings come in better than expected.