Stock Market, 401K mess will impact even those without investments, expert says

ELIZABETHTOWN, KY (WAVE) - The uncertainty of the market continues for yet another week, after a terrible Monday on Wall Street.

"I was surprised at the market was down as much as it was yesterday," said Kevin Ryan with the Elizabethtown Edward Jones office.

The closing bell Monday sounded more like panic around the globe as many markets finished down. The mess spread around the world because many countries bought American debt bonds and panicked.

But with that old saying 'it's not all roses at the top' the bottom is actually looking up.

"The downgrade with the debt with the us bond market is creating some short term problems, but for a long term investor I believe it's really creating some really great buying opportunities in the stock market," Ryan said.

Ryan says the market is actually better off than when the recession hit hard.

"Corporate America probably looks better now than it has in a long time after all the mess we went through a couple of years ago, corporate America has gotten the message and they are leaner and meaner and probably more efficient."

But the big fear is if downgrades continue. That's because everyone -- regardless of whether you gamble with stocks or 401K's -- will be dealt a blow.

"In a nut shell, it's going to cost the government more money when they go to borrow money; interest rates are going to go up and that means it's going to be more expensive and the concern is that it's going to lead to inflation which would hit everybody and means it would cost more money to buy goods and services at the grocery; at the gas pump," Ryan said.

But for optimists: there's still time to rebuild the U. S. credit rating.

"Keep in mind, there are 3 major rating agencies: S&P, Moody's and Fitch," Ryan said.

And those last two still have the U. S. at a AAA rating, something everyone hopes will continue.

"The market has a history of over-reacting to good news and over-reacting to bad news," Ryan said.

But the fear is that the bad news on Wall Street could transfer to Main Street with inflation and other issues.

Many Americans have already been hit hard when their 401K's took a tumble this week.

"You definitely don't want to panic. For someone that still has several years away before retirement, you need to think of it as an opportunity and continue to buy good quality companies at cheap prices," Ryan said.

One thing that's not cheap and has a lot of people rushing to buy: gold. It usually does the opposite of the market, making it seem more stable -- but pricey.

"You're buying at an all time high when the whole idea of buy low and sell high - if you're buying gold right now you're doing the exact opposite of what you should be doing," Ryan said.

Many investors say it's taken about three years for their portfolio to fully rebuild after the 2008 recession. But what if you're near retirement and don't have long to wait?

"When you're at the point of starting to take money out, you're taking it out in bits and pieces the same way that you put it in. There's not a light switch that goes off just because you retire that says you need to take everything out," Ryan said.

And for those leaving it in, everyone hopes the waves die down.

"I've had some people that've been out on the ledge, but I haven't had anybody that's jumped off," Ryan said.

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