Most experts still say a double dip recession isn't likely
UPPER PENINSULA -- It's been a long week for Jan Charles. With investments and her 401k tied up in the stock market, she is fearful for the future.
"It's hard to watch. It's hard to watch the ups and downs and the major drop in two days, 1100 points...isn't it going to come back?” asked Charles. “Which way is it going to go? How long am I going to work?"
Charles, like many everyday investors, is unsure of the market's future even after Tuesday’s 430 point gain.
So what caused all the turmoil? A major sell off of stocks began last week due to debt concerns worldwide, including in the U.S. Also, the credit agency, Standard & Poor’s, lowered the U.S. credit rating from AAA to AA+ for the first time in history. All this led to panic among investors and a sell off began.
But financial analysts, like Kevin Jaklin at First National Bank and Trust, said a double dip recession isn't likely.
"If you look at our economy and how it's structured now, based on where it was in 2008, we're in much better shape right now,” said Jaklin. “So it doesn't appear to be as worrisome."
Jaklin said investors that are close to retirement with risky stocks were likely affected the most.
"If you have a short-time horizon, meaning four years or less, you don't have as much time to recover a big market loss even though four percent in a short period isn't that difficult to overcome," he said.
Jaklin expects the market rebound to continue especially after the U.S. Federal Reserve announced Tuesday that interest rates will remain low until the middle of 2013.
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