Doug Mouton / Northshore Bureau Chief
NEW ORLEANS -- Financial planners around New Orleans are being flooded with phone calls in the wake of a 500 point Dow Jones drop on Thursday.
"The news that's coming out of the markets today is different that came out of the fourth quarter of '08 when we had the financial meltdown," said financial planner Randy Waesche of Resource Management in Metairie. "Then, people understood why it happened. Today, they're not understanding why."
Southeastern Louisiana University Finance Professor Dr. Rakesh Duggal pointed to several potential factors for the drop, including the slowdown in China and India, continued problems in Europe and the Congressional fight over the debt ceiling.
"If somebody's looking for a quick reversal," Duggal said, "it's probably not going to happen."
Duggal agreed with Randy Waesche, that this drop will not reach the proportions of the 2008 financial drop.
"We cannot compare what's happening today with what happened in 2008," Dr. Duggal said, because both U.S. Corporations and the American public in general are in better financial shape now than they were in '08, but that is not stopping the questions and comparisons from investors.
"They remember the 40 percent drop, and asking, is that going to happen to us today? " Waesche said. "So, my ears are full of cauliflower from being on the phone constantly for the past two days."
Waesche said he's actually encouraging many of his younger clients, those not close to retirement age, to buy.
"For the past two days, we've been pretty aggressive buyers for people who had money on the sideline and were of a certain age," Waesche said.
Duggal said "that's not a bad idea," because long-term he believes the market will produce.
The bigger question comes from those at or near the retirement age.
"I am trying to convince them not to panic and not to sell," Waesche said.
Both Waesche and Duggal said they see many positive signs going forward, just question marks about how long it will take to get there.