Here’s What to Do With Your Money in This Terrible Market
Stocks are plunging again with some indexes, like the Russell 2000 and the Dow Jones Transportation Average hitting bear market territory. That’s a 20 percent or more decline from its most recent high. 'The S&P 500, the Dow and the broader indices for the U.S. are not quite at down 20 percent from their 2015 highs so what that suggests to us is this correction might have a little bit more to go,’ said Ryan Larson, head of equity trading at RBC Global Asset Management. The S&P 500 is down 12.6 percent from its high on July 22 of last year. The Dow Jones Industrial Average is down 12.2 percent from its high on Nov. 3. ‘We could hit a bear market – we’re well on our way there,’ said David Nelson, chief strategist at Belpointe Asset Management. The sell off in U.S. and global markets on Wednesday was triggered by oil prices hitting fresh lows, as West Texas Intermediate fell below $28 a barrel. Larson said investor obsession with oil stems from uncertainty over where the bottom in prices sits. ‘Nobody knows just how far the declines are going to take us,’ he said. ‘Months ago it was $45 and now $30 and under $28,’ adding that oil in the low 20s seems close to a bottom. Nelson said bankruptcies for various companies within the energy sector are looming. ‘You’re already seeing credit default swaps widen in the sector,’ Nelson said, adding that the energy space’s woes could spill over to other parts of the economy. Larson is telling his long-term clients to remain patient as some of the concerns seen throughout the markets may turn into opportunities. Nelson is fond of the defensive industry. ‘They tend to do well even on those dark days,’ he said. ‘All you have to do is pick up a newspaper and understand that the defense industry is going to get a lot more dollars in the coming years.’ TheStreet’s Scott Gamm has details from Wall Street.
