Why Is The Stock Market Falling? Consumer Confidence Index Released

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This morning, we heard from our favorite barista that the stock market is plummeting. And we saw it again on the display screen in the elevator. And again on our homepage. “Plummeting” is not a term we like to hear in relation to our finances, but we will not panic. We will. Not. Panic.

Seriously—Stop Freaking Out. It’ll Be Okay.

When people say that the stock market ebbs and tides, this is what they mean. Just because things aren’t perfect today doesn’t mean that we’re all doomed. Rather, it means that the market will have another upward swing after people stop freaking out and selling their stock.

Here’s Why The Market Dipped.

The market is reflecting the actions of many individuals who are, quite simply, freaked out by the results of the Consumer Confidence Index (CCI), which were released today. The Consumer Confidence Index reports how consumers (like us) feel about the stability of the current economy. Are we willing to spend our money, or are we hiding it under the mattress? According to the June survey, many consumers aren’t feeling confident enough to spend the big bucks.

The Consumer Confidence Results Were A Shock, Freaking People Out.

For the preceding three months, confidence had been growing (as measured by the index). But, the slowdown in job growth upset the trend, making confidence decrease drastically. “Money is an emotional thing,” says LearnVest financial planner in residence, Lauren Lyons-Cole. “The current sell-off reflects our natural tendency to let emotions rule our investment decisions. Just remember that giving in to panic hurts investors in the long run.”

“If People Don’t Feel Confident Spending, It's Bad For The Economy As A Whole.”

Why is a slight lack of confidence important enough to torpedo the national economy? “We’re a consumer-based economy,” explains Lyons-Cole. “If people don’t feel confident spending, that’s bad for our economy as a whole.” Money is emotional and consumers may wield considerable power over the country’s economy, but here’s something to keep in mind: The CCI is a survey of 5,000 families. That’s .001% of the U.S. population. That’s about the size of a graduating class from New York University.

Don’t Go On A Selling Spree Today—Ride This Wave Instead.

While we like that the Consumer Confidence Index asks normal people how they feel about the economy, one of its biggest faults is that it’s so highly subjective. A person’s feelings change from day to day, minute to minute. Don’t panic because less than 1% of the country isn’t feeling too solid right now. Don’t go on a selling spree today—now’s the time to hold on and ride this wave.

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