What Does the Stock Market Crash Today Mean?

February 11, 2016Feb 11, 2016

The stock exchange has had another brutal day today, dropping at one point over 300 points. Unfortunately this is just the latest of a number of stock market drops that started last September.

The Dow Jones Industrial Average is now under 16,000; it was closer to 18,000 in September. In addition, stock markets around the world have been falling also.


Here are 3 key things to keep in mind:

1) The US stock markets have risen a lot since the crash of 2008, more than doubling in value. While it is not always true in the stock market that "what goes up must come down," it is certainly possible that the market may be due to come down.
2) The problem is not limited to the US. Stock markets in Asia and Europe are mirroring our problems, and the stock markets in Asia are doing much worse. So it may be tougher to shake this off.
3) The price of oil has a lot to do with things. Oil is now around $27 a barrel and was almost 4 times as high in recent years. While this might appear to be good for the economy -- cheaper gas lowers consumers' and many business's costs -- it is tough for the energy industry and related businesses that make up a large part of our economy.

So should we all panic? Probably not, but we should be aware of the fact that this may not be the last down day the stock markets have.