As any trader will tell you, the stock market is very volatile. While you can count on the market to rise over a substantial period of time, there are instances where there are large corrections. The housing crash of 2008 is a great example of one of these corrections. With the massive amounts of growth in the market lately, it is hard for investors to believe that there will be a correction anytime soon. These investors are too focused on their returns and the growth that seems to be virtually never-ending.
However, the Dow closed over 600 points down on Friday. There are less than ten times that this has ever happened in history. The last time this happened was due to the Brexit deal. With a decline of 666 points, this is the sixth worst close that has ever been recorded. While many novice investors may be troubled by this, veteran investors remind themselves of the 100-year history of the Dow. There has been substantial growth over the century that proves there is little to worry about in the long run.
Where the concern rises is in the panic that there may be a major correction coming soon. With a student loan bubble ready to burst, there could be major repercussions in the market. Many economic experts have also predicted that the massive amount of loans being handed out to individuals could result in a crash very similar to that of 2008. Only time will tell what will really happen in the market. If history repeats itself, a massive correction is long overdue. If more loans are being handed out without proper verification or qualifications, it is only a matter of time before the fabric of the American economy starts unraveling. It will be interesting to see what the next week holds for the Dow.