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.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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