MYRTLE BEACH, S.C. (WMBF) - As cases of the fast-spreading coronavirus continue to grow so does its impact on the world’s economy.
The Dow Jones dropped more than 2,000 points Monday amid the coronavirus outbreak and a deal to stabilize oil prices falls through.
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So, what does this mean for your wallet?
Dr. Chris Saint John, a financial planner with Carolina Wealth Advisors, said that it depends on your financial situation.
He said with something new comes with the fear of the unknown.
“You think back to 9/11. We hadn’t really had that in today’s age so that brought a lot of fear. Markets dropped tremendously,” St. John said.
Because of it, some people may act on emotions and sell their stocks for fear of losing money.
“People are reacting to those markets. Are they reacting to their emotions or are they reacting to what they think is the best for them?” he said.
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St. John said impact varies depending on who you are and your financial plan.
Take your 401K for example. For young people still paying into their retirement, the recent drop in the stock market may be a good thing.
“You want this kind of volatility, which means that every time you’re putting a little money from your paycheck into your 401K or investment account, you’re able to buy some stuff at a cheaper price,” St. John said.
However, if you’re older and have already invested a lot in your retirement, he said this may cause some people to get out of the stock market and turn their investments into cash.
“That’s great and that may appease the short-term of things, but when do you get back in?” St. John said.
That’s where doing some homework comes in. St. John said what you should do is talk with your financial advisor to determine what’s best for you.
"Before you make any emotional decision you need to go back to understanding what your original premise or goal is for these funds,” he said.