Many people have 401ks or IRAs with money in the stock market – and lately concerns have been rising due to dropping stock prices and high inflation. We spoke with Barry Bigelow, a local financial analyst to break down what the volatility in the market will mean to Northlanders. Bigelow works with Great Waters Financial in Duluth.

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“What I would say is cooler heads usually prevail when it comes to the stock market. Seven out of ten years on average are positive. We are going to go through some years where there are negative returns in the stock market. And this may be one of those years. And it’s critical more than ever to have a plan of how you invest for what you’re buying,” said Bigelow.

The word ‘recession’ has been popping up in many people’s minds lately – but Bigelow says there’s ‘no need to make any big changes just yet.’

Bigelow explained that since 2008, there have been fail safes implemented to help prevent another large stock market sell off.

One fail safe allows a pause on trading if the stocks drop too far, too fast. Another is the ability of the Federal Reserve to lower interest rates in the event of a dramatic drop in the stock market. Lower rates encourage borrowing for consumer purchases or home refinancing – bringing more money into the economy from the banking sector.

Bigelow explains understanding what you are investing in is critical to how you should react in times of high volatility. Working with a financial advisor is one way to ensure you have a plan on how to tackle economic changes within your investments.

“The reality is you need to have a plan. We invest for a reason. Whether that reason is to buy a house or buy a car or to be able to retire, each of those reasons has a different way of investing for it,” said Bigelow.