Markets dropped sharply Monday in the worst single-day drop of the COVID-19 outbreak as investors calibrated their outlooks to severe changes that are underway in how Americans live, work and spend.
We called up Barry Ritholtz, chairman and chief investment officer of Ritholtz Wealth Management, to help us put it in perspective.
To avoid turning into a “stock market zombie,” Ritholtz said to remember that ups and downs — even really big ups and downs — are the nature of the beast.
“We don’t get 10% swings up and down on a daily basis, but these happen on a regular basis. I think the biggest mistake people make is calling these things hundred-year floods, because we get them every 10 years or so,” Ritholtz said in an interview with Marketplace’s David Brancaccio.
Ritholtz cautioned against letting recent volatility scare you away from your long-term investment goals — something easier said than done.
“People are herd animals,” he said. “We’re primates that evolved in groups. That’s why it’s so difficult to be a contrarian: because every instinct you have wants to do what the crowd is doing. And historically that has not been the way you make money in the stock market.”
Click the audio player above to hear the interview.
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