Stock market woes explained - Toledo News Now, News, Weather, Sports, Toledo, OH

Stock market woes explained

TOLEDO, OH (Toledo News Now) -

Monday’s drop in the stock market may have come at a surprise to some, but one financial expert here in Toledo says he had been expecting this to happen for weeks.

Alan Lancz, President of Alan B. Lancz and Associates says while he was expecting this kind of situation, what he calls “momentum investors, or millennials” are experiencing something new with the thousand point drop.  

“Today what culminated was a situation where there was panic selling in the US,” said Lancz.

The financial expert says when China halted trading on more than 1,400 of their stocks six weeks ago, it created a negative situation.

“As China  has opened up their markets to buying and selling again, trying to get back to the natural flow, it's a situation now where there's a lot more sellers than buyers and it's pushed over into our markets, European markets,” said Lancz.

And part of the issue, Lancz says is investors like “millennials” wanting to be fully invested. 

“That created a situation where they had to sell just to raise cash and you had a 1,100 point decline in the Dow Jones Industrial Average this morning.  It's rebounded significantly, so a lot of that is panic selling,” said Lancz.

Lancz says he was one of the only experts in the area to see the writing on the wall weeks ago and he prepared his clients for this very moment. 

“One of the reasons six weeks ago we started raising cash was to have this cash available for this panic selling,” said Lancz.

He says the biggest pull back in recent history was four years ago in 2011, also because of international currency woes. But this doesn't equate to a stock market crash.  

“The higher the market goes, the less a thousand points is percentage wise. So this is nothing near the 87 crash or anything like that. But it's the most we've seen in 4 years,” said Lancz.

Lancz says he is advising his clients to take advantage of the panic sellers and buy cheaply. 

“The biggest advice I can give is don't panic. Even if you're fully invested, which you shouldn’t be, try to take profits or get out of the higher risk investments into strength here, into any rallies.  Conversely, if you do have cash and took the profits in the last month or two, use that, take advantage of these panic sellers,” said Lancz.

As far as what the future holds, Lancz says, “I think you're going to have more volatility like this. So if you're fully invested, which we have been advocating against, I would use any rallies like you're seeing a rally this afternoon from the lows to reduce risk, lighten your position, build up some cash.  Utilize that cash then, or if you sold into the strength in July like our clients did, utilize that profit taking to buy into this panic selling.”

Bottom line, Lancz says is that this situation is good for the long run, because you have to take advantage of the market swings and be disciplined. He says don't always buy and think it'll go higher, because what happened in 2007 with the real estate market collapsing, the same thing could happen on a much quicker scale in the stock market. 

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