DENVER — If you invest in stocks, how are you supposed to react to this chaos on Wall Street?
Denver7 on Monday contacted Bruce Allen, president of Bruce G. Allen Investments LLC, to get some answers for you.
What's causing the chaos?
Allen said the markets are reacting to the uncertainty of the situation. There is fear because no one knows how or when this crisis gets resolved or how much damage it will do to the economy.
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Allen said he would never advise anyone to sell stock during crisis, as tempting as it may be.
"That has proven to be very difficult to profit from. It's a mistake typically," said Allen.
What should investors do?
One of the keys things that's going to help investors is making sure you really have a robust diversification strategy, he said.
"Whenever we get into uncertain time, it's also uncertain about how we resolve this and who will be the winners and who will be the losers. So being diversified and being cautious can make a lot of sense right now," said Allen.
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Allen adds that for long-term investors, this crisis will likely provide opportunities to buy stock at a bargain that will pay off nicely in the future.
He also provided an encouraging picture of the long-term economy.
Allen said that even if the U.S. economy goes into a recession, it is starting from a much stronger position than recessions in the past; therefore, the duration and severity should not be as severe.
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