Despite the scary headlines, these are signs of a healthy market, said certified financial planner Scott Hanson, founder and senior partner at Hanson McClain Advisors.
“The market has to go through this sort of thing,” Hanson said. “The longer we go without volatility, the more nervous I become. I almost welcome a bit of this shaking out.”
What’s more, the markets and the economy are in a much better position than they were in the last dramatic downturns in 2008 or 2000, said financial advisor Ted Jenkin, CFP and CEO of Oxygen Financial.
U.S. earnings are still very strong and unemployment remains at an all-time low.
In fact, the average correction for the S&P 500 since World War II lasts four months and sees equities slide 13 percent before bottoming, according to analysis at Goldman Sachs and CNBC.
“The economy, fundamentally, is still very strong,” Jenkin said. “But if you’re in it for the next five years, there’s no reason to panic.”