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Oct 6, 2008 7:35 pm US/Eastern
How Much Lower Can The Markets Go?
PITTSBURGH (KDKA) ―
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The Big Board at the New York Stock Exchange is seen Monday, Oct. 6, 2008, at approximately 2:28 p.m. ET, with the Dow down more than 700 points.
CBS
The cheers as the stock market opened this morning quickly turned sour as stocks plunged and local economists tried to reassure everyone that an end was in sight.
"How much lower can it go?" KDKA Money Editor Jon Delano asked Brian Koble at Hefren Tillotson.
"I think we are much closer to the bottom than we are to the top," said Koble.
Koble says the stock market -- and most of us -- have taken a hit this year.
"The Dow Jones Industrial average is down about 26 percent in 2008," said Koble. "The Standard & Poor' 500, which is a broader measure of the us economy, is down nearly 30 percent year to date."
Today the Dow plunged below 10,000 points -- a mark it first crossed above in 1999 -- and that puts most of us back to the future.
"The stock market has been virtually flat for the last decade," noted Koble, who says the record loss today reflects market losses overseas.
"When Europe has a slowdown, it affects us," he said. "When we have a slowdown, it affects Asia. So no one region or country is in this all by itself. Some of the so-called emerging markets are down the most. Places like Brazil, Russia, India, China are down 50 percent this year."
So what happened to that Wall Street bail-out?
"What the government did over the short-term was greatly reduce the risk of the worst case scenario.
They certainly didn't do anything that would make the markets turn around on a dime," noted Koble.
Which means -- depending on your age -- this could be the time to buy more stock at very cheap prices.
"If you have a long time horizon, you should be looking at this more opportunistically than you should be back-pedaling," said Koble. "If you are someone who is about to retire and you've suddenly discovered that your portfolio is too aggressive, then certainly if you can't sleep at night certainly you should be looking at some of the more conservative options within your 401-k plan."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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