Stock values plunged during President Obama’s nationwide address Monday and the markets closed after dropping 634 points, renewing fears of a recession.
Many Nebraskans are worried about how the downgrade of the U-S credit rating by Standard & Poor’s will impact their retirement nest eggs.
Financial advisor Robin Edgar says everyday life won’t change much, but people will have to make some adjustments with their financial investments.
Edgar says people are going to have to “take a little pain” before things get better, which will likely mean higher interest rates on mortgages and cars.
In the past two-and-a-half weeks, stocks have lost 15-percent of their value, while Monday is now considered the worst day for the stock market since the financial crisis hit in the fall of 2008.
Edgar remains optimistic about the stock market’s overall outlook and she says a rally is likely before the week is out.
She says a lot of portfolios are going to have to realign what they are doing, because if things in the prospectus say they can only hold Triple-A-rated paper, that impacts treasury bonds, so people might have to sell those.
Edgar says you may want to look at making some investments now that will pay off in the future.
She thinks there are some huge buying opportunities, even though it will be a while before the economic situation corrects itself.
She says it won’t be over anytime soon, but that if people have some extra money, they should pick some points and put some of that money into the market. She says even though the market could go lower, “we have to believe that eventually, the market will go higher.”
Standard and Poor’s dropped the U-S credit rating from triple-A to double-A-plus, based on last week’s agreement between Congress and the White House to raise the nation’s 14-point-three trillion dollar debt ceiling while cutting future spending.