Stock market plunges more than 830 points in biggest drop in months

Wednesday, October 10, 2018
SAN FRANCISCO -- Ken Winans and Mark Edwards of Novato watched the stock market fall Wednesday by more than 830 points. They say they had been waiting for this, so it was no big surprise.

"If you take all of the Octobers since 1970 and average them out, it is the second-worst performing month in the Dow Jones Industrial Average," Winans said.
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"What is worse?" we asked. "September is typically worse."

If you're wondering about the mechanics of the drop, financial experts describe this as a rebalancing act. Stocks have performed well for a long time while interest rates have been low.

Now, there's a change in equilibrium.

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"As interest rates go up it re-prices bonds, puts temporary pressure on stocks," Winans said.
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Edwards says it's not time to worry about the sky falling like Chicken Little.



"The S&P is at an all-time high. This is not stuff you panic about," he said.

That includes people with fixed incomes counting on a 401k. The good news for them is that while September and October stock prices historically trend low, in November, December, January, they move up.

In short - you might not want to panic, even if the market opens lower Thursday.
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