Are we heading for a bear market? Dow sell-off rattles nerves
NEW YORK -- The stock market picked up where it left off last week -- continuing its sharp slide. The Dow plunged at the opening bell and briefly recovered, but in the afternoon, the sell-off resumed. At one point, the blue-chip index had fallen by 1,600 points before closing down 1,175.21, a record one-day point drop.
CBS News business analyst Jill Schlesinger sat down with "CBS Evening News" anchor Jeff Glor to discuss whether this is the beginning of a bear market.
"We have been enjoying this bull market since March 9 of 2009, the second-longest bull on record, so it stands to reason that we've been a little bit overdue for some selling," Schlesinger said. "If you look at it, this bear market, a bear market would be defined as a 20 percent drop from a recent high. The last two days were down eight and a half percent from the high reached on Jan. 26. So, close to a 10 percent correction, not there yet."
Schlesinger adds we've had these kinds of dips before, and we don't know what will happen on the next day of trading. Meanwhile, President Trump has taken credit for recent highs on Wall Street. How have investors fared since the election?
"The best way to think about it is what would happen if I put $10,000 into the stock market right after the president was elected," Schlesinger said. "Even with this two-day selloff, that $10,000 would be worth $13,280 today."
Schlesinger acknowledges Monday's drop is scary, but said long-term investors should stick to their game plan.
"We know when people try to time the market, get out of the way of maybe an impending bear, they may make one good decision, but it is so hard to make the second good decision -- when to get back in," she said. "Historically, market timing doesn't work."