Is it a market correction, or panic? They could be one in the same.
"A true correction would be 20 percent, so that'd be 8,000 Dow points," said UNO business economist Mark Rosa. "I think if we reached 8,000 Dow points, many people would consider it a panic."
Rosa says compared to the 2,400 points the Dow has lost in the last three days, that kind of a drop would frighten most investors.
The Federal Reserve Board is all but guaranteed to reduce rates now, but investors were already expecting that, so it is not going to stop a lot of them from selling.
Rosa says the fed does not have to wait until next month's meeting, but they don't want to give the appearance of overreacting, either.
"They could hold an emergency meeting, and I think if they did so, that would send a signal to the markets to say, 'wow, this is even worse that what we expected,'" Rosa said.
So if there are potentially thousands more points the markets could lose, what do you do to protect your retirement fund?
"Take the risk out of it," said Rosa."You're not taking the money out of the 401k, you're just moving it to a less-risky area."
Rosa says that would mean shifting your 401k investments from stocks to more stable bonds.
