New Canaanites Not Panicking Over Stock Stumble

NEW CANAAN, Conn. – Bill Root was far from the happiest man in New Canaan on Thursday, even if the look on his face might have said otherwise.

Two weeks ago, while Congress was fighting about whether to raise the nation’s debt ceiling, Root converted his entire 401(k) retirement savings account into cash. He returned that money to the stock market earlier this week after the ceiling was raised, figuring the coast was clear.

Only it wasn’t. The Dow Jones Industrial Average fell more than 500 points on Thursday, costing Root, 44, about 7 percent of his retirement savings in two days.

“It’s not fun to see this happen,” said Root, trying to enjoy the late afternoon at the New Canaan Starbucks store. “I thought it would have a bounce after the legislation passed. Not only did it not, but it dipped significantly.”

But Root is far from retirement age, so he’s not panicking yet and won’t pull his money out again like others might consider doing. “I’m at least 20 years away from retirement,” he said. “You’ve got to take it all in stride.”

Peter McAleer, owner of the McAleer Wealth Management Group, says Thursday’s dip was caused by fears about the nation’s economy, more unemployment and financial problems in Europe.

“A lot of people are throwing the towel in and following the herd mentality,” he said. “They’re selling at the worst time.”

McAleer is telling his clients that this could be an opportunity for investors to buy when demand is low and to hold on for when the market turns around.  If the nation’s unemployment report, to be unveiled Friday morning, is worse than expected while the stock market remains down, McAleer will tell his clients to be aggressive and buy in. “I think for those that have a longer term perspective … it’s a good buying opportunity,” he said.

Are you nervous about the huge dip in the stock market? Are you panicked that things will get worse or are you confident the market will rebound quickly? Let us know by leaving a comment below. You can also visit our Facebook page to talk about it.

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