Though he has tried to push it from his mind, Gary Christo still remembers how he felt when the stock market collapsed in 2008.
“It was bad. I said, ‘Man, if I was going to retire now, what would I do?’ ” recalled Christo, a member of Boston College’s maintenance crew for more than two decades.
Seven years later, retirement is a lot closer for 60-year-old Christo. And while the market turmoil of the past week pales in comparison to the financial crisis, it has been perhaps the toughest test of resolve since those dark days for individual investors, who have been told that when sharp swings hit stock prices, the best thing to do is sit tight.
But uncertainty about the future of China’s economy — the main trigger for the “correction” that drove the Dow down more than 10 percent in a week — and its impact on the United States have not disappeared.
“Right now, you can’t pull anything out of it; you’d lose money,’’ Christo said. “Just like everybody else, I’m riding it out, I guess.”
Financial advisers are, of course, advising clients to ignore the volatility sparked by fears of China’s economic slowdown, and to hang on for the long term.
“China is important, and their problems are important,’’ said Susan Kaplan, a financial adviser in Newton. “However, I don’t see it as any significant threat to United States growth.”
Kaplan said her clients were calm, for the most part. Two contacted her to ask if their plans to buy second homes were on track. (They were fine, she said.) Other than that, she had a “barrage of e-mails,’’ she said, asking her to move some cash into stocks while prices were low.
Wednesday’s rally was a welcome relief after Monday’s 1,000-point dive in the Dow, followed by another 200-point drop Tuesday. But professional investors were loath to make any predictions of a lasting trend.
“We’re in one of those periods where calling what’s going to happen in the market from one day to the next is almost impossible,’’ said Dirk Hofschire, senior vice president of asset allocation research at Fidelity Investments. “We are bouncing around a lot. Volatility is extremely elevated.”
While companies in manufacturing and oil production and those that depend heavily on exports are exposed to the problems, analysts said, the household sector could even benefit from the turmoil. Lower oil costs, for instance, and cheaper goods from China are good for consumers.
Because US companies are still profitable and producing strong earnings, few people see the correction turning into the kind of prolonged down market associated with a recession.
“That doesn’t mean it’s over,’’’ Hofschire said of the up-and-down market. “But our best guess is there isn’t a fundamental reason for this to be an extended bear market.”
Still, recent days have delivered massive swings in stock values from hour to hour. One factor driving that more than ever is the level of program trading, or computer-guided trades triggered by indexes or securities hitting certain price levels.
David Mazza, head of exchange-traded fund research at State Street Global Advisors, said ETFs have represented about 40 percent of trading volume in recent days. ETFs are investments in a basket of stocks, usually tracking an index like the Standard & Poor’s 500. They are like mutual funds, only they trade like stocks, so investors can move in and out of them easily.
Mazza said not to assume institutions trading in ETFs are driving the market’s volatility; individuals also may be moving their money in this market, he said.
“Sometimes we might point the finger,’’ he said. But brokerage houses “might be selling on behalf of clients who want to take some money off the table in light of the volatility.”
For Christo, the maintenance worker, there are just two questions: Can the global uncertainty be resolved? Or is the market just going to keep going down?
“It’s a mystery,’’ he said.
Beth Healy can be reached
at beth.healy@globe.com.
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