EAST LANSING, Mich. (WLNS)– Friday ended the worst week the stock market has had since 2008.
6 News sat down with the Dean of the Broad College of Business at Michigan State University, Sanjay Gupta, to talk more about the stocks and what to expect after this week.
“The stock market is clearly spooked, and it has become nervous with whatever is going on in the business world,” said Gupta.
What has ‘spooked’ the business world, is COVID-19.
“The coronavirus is quarantined lots of factories, in fact the whole country,” said Gutpa.
Gutpa says the halt in Chinese manufacturing also limits businesses and goods here in the United States.
“In our day to day lives, either there will be some things that we count on that may not be available. It might be that the priciest of those things that we count on change, or go up dramatically because we are so dependent on a foreign source,” said Gutpa.
For example, if you have $100,000 in the Dow Jones, after this weeks more than 12% drop, you are likely to be out $12,000.
“If you have this invested, it could take about a year to earn that kind of money…and you just lost it in one day,” said Gutpa.
When it comes to your retirement savings plan, Gutpa says it really impacts people who are looking to retire.
“People who are either retired, or approaching retirement and depending on savings that they may have had in the stock market, which now are all of a sudden are not worth as much as they were before,” said Gutpa.
While major drops like this are not normal in the stock market, they do happen.
“Often times these big drops and these big climbs are emotional, and it is not clear that there is logic driving those decisions,” said Gutpa. “We’ve known about the coronavirus for a couple of months…but this usually happens, whenever we have these kinds of unknown and unexpected effects take place.”
Gutpa also said that if you do have money in the stocks, to be in it for the long haul, because the market will level out eventually.