All three U.S. stock markets continued to tumble Monday, reacting to brewing economic troubles in in China.

However, Dan Daily, a financial planner for 27 years with Edward Jones Investments in Vicksburg, said investors who are in the market for the long haul need not worry.

“I have had no one sell today due to panicking,” Daily said Monday afternoon. “We had a large number of customers investing Friday, as well as today. We’ve been expecting a correction at some point and it’s come to pass. It was not a surprise.”

In fact, the current slump in stock prices is an opportunity for investors, he said.

“Most of the companies people invest in, the profits of those companies have not changed, but the stock price dropped due to human emotional reaction, which is stronger than ever,” Daily said. “For the long-term investor, it’s never a time to sell when the market is in a correction or a bear market.”

Unfortunately, history shows most investors don’t follow the best practice of buy low, sell high, Daily said.

“You should buy low and sell high, but people’s patters of behavior show they really do otherwise,” he said.

In February and March of 2000, when the stock market was its all-time high, the volume of purchases in the market hit an all-time high. Likewise, in October 2002, when the market dropped below 8,000, record selling took place, Daily said.

“My advice is, if they own quality investments, which they should going into this downturn, and they do not have the need to spend their money in the coming six or 12 months, I suggest they not sell and let the natural correction run its course,” Daily said. “A dozen times since World War II, we’ve had significant drops in the market and a dozen times, we’ve had recoveries.”

Daily said investors will also face uncertainly when interest rates rise, which he said is expected sometime in the fall.

“We won’t see a large increase in interest rates, but anytime we see a transition from low interest rates, when that policy begins to change, we’re going to have volatility in the market,” he said.

Daily’s best advice: “Don’t buy into the gloom and doom.”

Own companies making good profits and understand that you cannot predict the highs and lows, he said.

“The best way to make money in the stock market is to plan to be an investor over the long term.”

The Dow Jones industrial average plunged more than 1,000 points shortly after the open of trading, before regaining ground throughout the day. Despite rallying after the initial sell-off, the Dow ended the day 588.40 points, or 3.6 percent, lower.

The point decline was the eighth-largest ever, but on a percentage basis, it’s not close to the top 10 declines for the index, according to S&P Dow Jones Indices.

The Dow’s steepest percentage decline was a 23.5 percent fall on Dec. 12, 1914. It would take a decline of more than 7.87 percent, nearly double Monday’s decline, to break into the 10 worst.

 

The Associated Press contributed to this report.