Welcome to Money for the rest of us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it.

I'm your host David Stein. Today is episode 489. It's titled, Why Did Markets Sell Off? What should you do?

Yesterday, Monday, August 5th was one of those violent drops in the stock market that can be incredibly unsettling

On Monday the Japanese stock market fell over 12% its worst one-day decline since 1987.

In October 1987, the U.S. stock market and many markets around the world fell over 20%.

This past Monday most other stock markets besides

Japan fell between 3 to 4%. The VIX Volatility Fear Index, this is essentially the volatility priced into

S&P 500 U.S. stock options, it jumped to 55 during the trading day on Monday and ended at 38.

Back at the end of July it was around 16.

We've seen interest rates fall in the U.S.

The 10-year Treasury bond has fallen about a third of a

percent in the past couple of days taking it down to 3.8 percent. This violent drop in the stock market reminded me a really last time this happened and we did an episode on it was June 2020.

I was out with the pro we were up in the mountains and I happened to get some internet and I saw that the Dow Jones Industrial average had plummeted 6.9%.

It can invoke some fear, some uncertainty. We ask, what is going on? We think about our portfolio, maybe it's too risky. Perhaps we're approaching retirement and then we worry, well, what if things keep getting worse and we won't be able to

retire? Should we start selling? Apparently a lot of people wanted to sell on Monday

because it looks like the Charles Schwab and Fidelity apps ran into some

technical issues.

People couldn't log on to their accounts.

Now perhaps it was just too many people.

Others look at drops like this and think,

well, maybe it's a buying opportunity.

The market turmoil yesterday

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