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How Do Bad Days On The Stock Market Affect People’s Retirement Savings?

Photo credit: Associated Press

Trader Robert Oswald, right, works on the floor of the New York Stock Exchange, Aug. 26, 2015.

How Do Bad Days On The Stock Market Affect People's Retirement Savings?

GUEST:

Dan Parks, finance lecturer, San Diego State University

The U.S. stock market has been rising and falling at an alarming rate since Monday.

At one point in trading Monday, the Dow dropped 1,000 points before closing down 3.6 percent.

On Tuesday the market looked like it was on the upswing, but fell again in the last hour of trading ending the day down 1.3 percent.

Dan Parks, a finance lecturer at San Diego State University, said the downturn is a "normal variation."

"I looked at 1980 to 2015 — 33 out of the 35 years, the market has been down at some point during the year," Parks told KPBS Midday Edition on Wednesday. "On average, the downturn is 9.2 percent."

But, for those who have their retirement savings tied up in the stock market, losses like that can be scary.

Parks said a downturn is a good time to invest more.

"It is a good time to buy in the market," Parks said. "The reason we're buying low is because nobody wants to buy."

Parks said younger adults should be more aggressive with their investments, while older individuals should be conservative.

"You care about where it's (stock market) going to be when you retire," Parks said.

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