All three major stock indexes had a serious drop Tuesday. The nosedive wiped out all gains for the year, bringing the marketplace down a bit below where we started at the beginning of the year.
The Dow closed with a loss of 551 points, the S&P dropped 48, and the Nasdaq lost 119 points. Shares of Target dropped 10 percent. And the "FAANG" stocks – Facebook, Amazon, Apple, Netflix, and Alphabet – collectively lost more than $1 trillion in market value.
CNBC’s Global CFO Council’s biggest concerns are a slowing economy and trade amid new federal regulations. The president of Pinnacle Wealth Management in Denver agreed there are some challenges but urged this sort of swing is the norm. Tom Stefaniak explained the drop is not rare, just different from the anomaly we saw in 2017.
“Every month 12 months in a row, we had a positive rate of return. You know how many months that's happened? Never. That's never happened in the history of the stock market. And people got used to only going up,” Stefaniak said. “2018 we've had ups and downs and ups. We're in a down right now. That's normal.”
CNBC’s Global CFO Council predicted the Dow will drop another 2,000 points, and dive below 23,000 points before reaching its all-time high again. Stefaniak admitted while it’s difficult to predict what’s next, you shouldn’t panic about these short-term fluctuations.
“If your goal is to send your kid to college in 15 years, think 15 years in the future. If your goal is to retire in 5, 10, 20 years, think long-term,” he advised.
Stefaniak recommended sitting down with your financial adviser to identify your goals and figure out what works best for you.
And as for the slump happening during the holidays, he said to pay down your credit cards, pay off your mortgage, relax, and enjoy the family week.