On Monday, the Dow picked up where it left off on Friday and continued to plunge, dropping 1,175 points. However, economists say despite the drop, there is no need to panic.
Tom George, professor of finance at Bauer School of Business, said the percentage of the plunge is the more important number.
“It dropped about 4 percent today,” George explained, “but to put that in context, the S&P 500 and other measures of the market had been up by 6 percent just in January. We ended the first part of the year down just about 1.5 percent, which in the grand scheme of things, isn't such a big deal.”
Compare that 4-percent drop to the biggest drop ever, which was Black Monday in 1987, when the Dow dropped 22 percent.
According to George, Monday’s drop, paired with low unemployment and higher wages, is hardly something to panic about.
“I'd say, for the most part, people should be feeling positive about what's going on in the economy," George said. "Stock prices go up and down and as far as I can tell this is just stock prices going down after they've gone up quite a bit.”
Here’s the big picture, the market has mainly been going up over the last year and has been trending higher for the last five years.
“This is a big correction in a day or two, but it's not a big economic event," George said.
George says anyone with stock or a 401K should not take any major action.
“Do the same thing you normally would do. Probably do not pay too much attention to your computer screen during the day," George said.
To put this into perspective, if a person put $10,000 into the stock market the day after the election, it would still be worth $13,280 today.