MILWAUKEE -- Tuesday, Feb. 6 was an erratic day on Wall Street. It pointed toward another day of losses after the largest single-day point drop in history on Monday, but it did not end that way -- finishing up more than 560 points.
The week's volatility comes after months of steady gains and record-breaking stock prices. That's why financial advisers say you should not panic.
"It is a bit unnerving to have such a drop within a two-day period," said George Schmidley, founder and president of the Milwaukee-based firm Affiliated Financial Advisors, Inc.
Schmidley has been in the financial advising business for more than 30 years. He said it is normal for stock markets to fluctuate.
"Markets have advanced... frankly over the last 14 months without pause, and little volatility," Schmidley said. "So in some sense, normal market volatility is returning to the stock market."
It is a reminder that risk is always a factor when investing.
"We could potentially lose another 1,000 to 2,000 points and still not be in a crisis situation for investors to really react to," Schmidley said.
Schmidley said this does not appear to be a sign of deeper economic trouble. Rather, he is calling it a technical correction.
"At this point, our economy is still in great shape. Our job market is still in great shape." Schmidley said. "I will add that we will be in trouble if the economic indicators start to change."
While it is okay to be cautious, Schmidley advises against making decisions based on emotions or alarm.
"This is really a small drop relative to other market drops," Schmidley said.
As the market stabilizes, Schmidley advises long-term investors to use this to their advantage.
"It certainly is a buying opportunity for longer-term investors to add to their portfolios," Schmidley said. "It allows them to go back to stock prices if they missed out on the gains this year or the end of last year."
Schmidley suggests that people nearing retirement take a close look at, and re-evaluate their portfolios. He also said if anyone is expected to need cash in the next year for large expenses like school tuition or a down payment on a home, they may consider moving that money from the market now.