ELLSWORTH — The nation’s first-ever credit downgrade has sent financial markets on a wild ride, but local financial experts agree it is no time for panic.
In the wake of Standard and Poor’s downgrade of the United State’s credit rating — from triple A to AA plus — the Dow Jones industrial average Monday fell 634 points, the steepest drop since December 2008.
The financial roller coaster continued Tuesday, as the Dow Jones industrial average rebounded by more than 429 points, its biggest point gain since March 2009 and the 10th-highest point gain in history.
“At a time like this, it is very bad to do anything drastic,” said Ben Wootten, owner of Wind River Capital Management. “Modify a little, but don’t make major changes because you’re convinced this is a defining moment because it probably isn’t. I’ve never seen a situation like this where panic helped.”
Anne Gibson, owner of Gibson Financial Solutions, agrees.
“It’s important that people not panic,” she said. “We’re trying to digest this. It’s the first time and we’re not sure how it will play out. The difference between AA plus and AAA is not that great.
“It could mean higher interest rates. It could affect the bond market, but it doesn’t appear so. The stock market’s down, but that is just a reaction — fear of what’s happening and what’s going to happen.”
She said many investors after living through the stock market collapse of 2008 and 2009 now have better placed portfolios.
“You need patience,” she said.