JACKSONVILLE, Fla. – Stocks around the world plunged Friday as investors feared that a trade conflict between the U.S. and China, the biggest economies in the world, would escalate. A second day of big losses pushed U.S. stocks to their worst week in two years.
The business relationship between China and the United States may be causing it, but Americans seem to be losing sleep about the oncoming trade war. That filters down to people’s retirement money and long-term investments.
On Friday, the Dow Jones industrial average lost 424 points, or 1.8 percent. On Thursday, the same index cratered by 734 points.
The two-day drop totaled more than 1,150 points.
Investors are rattled by President Donald Trump’s announcement of tariffs on about $50 billion in Chinese imports.
China vowed to retaliate, so world markets have been affected, too.
On Friday night, News4Jax spoke with a local financial planner who focuses on defensive strategies.
Shay Woodward IV, with Performance Wealth, shared what his advice would be if you're worried by the market volatility.
"Go all the way back to the recession. OK, now we're talking. Now, put it in perspective. It hasn't done anything unless you look at it just a little finite time frame," Woodward said. "Breathe. It's OK. We got this."
Woodward said there’s a bigger picture to the stock market than the Volatility Index, which is often called the "Fear Index."
He’s preaching patience to his clients, and taking a conservative approach.
News4Jax also asked Woodward about his feelings, and what he'd recommend to clients, about the saying, "Buy low. Sell high."
"I would lean more toward taking a breath," he said. "If you go back and look at the typical market cycle in a presidential election year, going back all the way to 1900, and the average was an (electrocardiogram). Well, last year, it didn't happen. It looks like it's a year late and here we go."
Woodward said no one has a crystal ball, but it’s important to look at market performance over long stretches, not short windows -- such as a week, a month or since the start of the year.