PITTSBURGH (KDKA) — The stock market took a tumble on Monday.READ MORE: Pennsylvania Supreme Court Chief Justice Outlines Plans To Step Down
It was the largest ever single-day drop for the Dow Jones Industrial Average, down more than 1,500 points before a slight rebound.
On Friday, the Dow dropped 666 points. And then Monday, 1,175. Enough to erase the gains made so far this year.
So how concerned should you be about your retirement money? And what’s likely to happen next?
“I wouldn’t be an alarmist,” said Dave Root from D.B. Root & Company, a wealth management company in Downtown Pittsburgh.
However, he also says we could be in for a bit of a roller coaster ride ahead.
“I think investors have to brace for some more volatility to be sure,” he said.
The stock run-up began in 2009 when the economy staggered out of a recession, and it surged after Donald Trump became president.
But the growth lately had many analysts predicting a correction.READ MORE: Pittsburgh Police Investigating Multiple Overnight Gas Station Armed Robberies
“The fundamentals were really good, but I think it was more driven on sentiment,” said Root.
Oddly enough, reports of wages going up may have had a negative impact, with investors worried that’ll lead to inflation.
“That does send a signal, maybe even a shot across the bow, that inflation is out there,” said Root.
And the concern is that could lead to the Federal Reserve raising interest rates.
While he says there’s no reason for worry long term, Root expects a bumpier stock market ride than we’ve become used to.
“I think we’re going to settle into a period of heightened volatility,” Root said.
For some perspective, while Monday’s drop of almost 1,200 points sounds drastic, it only worked out to be a drop of 4.6 percent.
Back in 1987 on Black Monday, the Dow only dropped 508 points, but back then, that equaled a 22 percent drop.MORE NEWS: Stimulus Check Update: Some May See Even More Money From Potential Economic Relief Package
Root says that was scary.