Market slump? Don’t freak out

Q: How freaked out should I be when the market crashes, say, 274 points, as it did recently? — C.D., Santa Rosa, Calif.

A: Don’t freak out. Stocks and the overall market move up and down every day the market is open, with some of those moves being sizable. It’s smart to think in percentages instead of points, though — a concept that the financial media don’t seem to grasp. On Aug. 17, for example, the Dow Jones industrial average dropped a seemingly massive 274 points — the second-largest single-day decline in 2017. The Dow began that day at 22,025, though, and ended not that far away, at 21,751. Those 274 points represented a decline of only 1.24 percent.

There have been — and will be — many moves of much more than 1.24 percent in the market. In 1987, for example, the Dow plunged 157 points, but at the time, that represented a fall of 8 percent. A 2008 drop of 778 points was a 7 percent decline. Meanwhile, a seemingly small shrinkage of 38 points in 1929 was a 13 percent drop, followed the next day by a 12 percent fall.

Despite its volatility, the stock market’s long-term trend has always been up. Only keep money you won’t need for five (or even 10) years in stocks — and when the market plunges, grab your shopping cart.

Q: Are there any bills larger than the $100 bill? — F.W., Columbia, Mo.

A: There used to be. The Department of the Treasury and the Federal Reserve System discontinued $500, $1,000, $5,000 and $10,000 notes in 1969, due to their not being used much. (Indeed, they were last printed in 1945.)