NewsCovering Colorado


Dow drops almost 800 points, financial planner explains why

Posted at 9:49 PM, Dec 04, 2018

COLORADO SPRINGS –  The Dow Jones Industrial Average took a major plunge on Tuesday, but local investment advisors are telling people to be patient and not panic.

Colorado Springs Financial Planner Craig Carnick said he believes there are four different things that triggered Tuesday’s market decline. The combination of those things, he said, created a huge rush to the door to try and get out before the Dow falls anymore.

Carnick said, “I wasn’t surprised. There’s been a lot of tumult of late.”

Carnick believes one of the first factors that led to the Dow’s nearly 800-point drop was confusion over trade deals between President Trump and his Chinese counterpart.

“There were a lot of expectations a few days ago when he came back from South America, that there’d be great deals with the Chinese.”

However, nothing has been announced yet.

“The second thing that happened…JPMorgan Chase has made a prediction that in the next year cash is going to do better than stocks.”

The third factor has to do with Toll Brothers.

“One of the largest home builders in America has turned in very depressing numbers which seems to indicate that the housing market is starting to soften.”

The fourth factor, he said, is that “the yield curve has become inverted which basically means that short-term interest rates have gone up higher than long-term interest rates.”

Carnick wants to remind people that if you compare this situation to a year ago the Dow is still up by 3.5% in spite of all these factors. As far as what the average investor should do, he said just sit still and be patient.