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Experts urge calm during wild ride on Wall StreetPosted: Updated:
The Dow Jones industrial average regained some ground Tuesday after suffering its worst loss in six years Monday, and financial experts say investors should remain calm despite a volatile few days on Wall Street.
It closed up more than 560 points, and the Nasdaq rose about 150.
"I think we need to work through it, acknowledge it's with us and say this is status quo," says Andrew Samalin of Samalin Investment Counsel in Chappaqua. "No volatility is not something to expect. Volatility is the price you pay, in some sense, for good returns over time."
Samalin says the rollercoaster of stock prices makes sense -- and doesn't hint at a recession.
"The markets were up from 6,600 on March 9, 2009, and were up 26,500 as of a week and a half ago, so if we give back 2,000 points, I'm not so sure it's the end of the world," he says.
The recent turmoil comes from fears of inflation, which could rise this year as tax cuts take effect, experts say.
"The market is pricing today what's going to happen six months from now," Samalin says. "So after they figure out what they think's going to happen, they price securities."
The bottom line: Experts say you shouldn't sell your stocks because the market is constantly changing. Instead, they say you should set long term financial goals and seek advice from someone you trust before taking action.