Montgomery, Ala. (WSFA) -- The Dow Jones Industrial average traded below 11,000 for the first time in two years Friday, but ended the week above that mark. Overall, the market average is off more than 20% from it's all time highs in 2007.
It's left many investers are asking, 'What do I do now?'
Financial planners say there's no reason to panic. In fact, some say the downturn may even be good news if you can ride it out.
"What happens is, a lot of people get scared at this time. But it's the worst time to get scared," said Joel Sanders of McDonald, Barranco & Sanders.
Sanders tells his clients not to stop investing. He says you're actually buying stocks cheaper now. And you'll be glad you have them when the prices go back up.
"What's going on right now is we're having a severe meltdown in financial stocks," Sanders said.
He's referring to mortgage companies like Fannie Mae and Freddie Mac, which have seen big losses. There is fear that the companies, which guarantee nearly half of all U.S. mortgages, may need a government bailout. However, the companies say they have enough capital to cover the crisis.
Sanders compares this newest market meltdown to the bursting of the tech stock bubble eight years ago. Although, unlike most tech stocks, the financials should recover.
"With these internet and dot-com companies, they weren't necessary to facilitate our economy, whereas these financial stocks are extremely important," Sanders explained. "We've got to make loans so people can do business."
It may take some help from the government, but most analysts predict a turnaround in the market by late next year. Until then, they say keep your portfolio diversified and keep making those deposits.
"If you do that, then you're typically going to come out in good shape," Sanders advised.
That's especially true if you're planning to leave your money in the market for three or more years. If you need it sooner, it might be a good idea to sit down with a financial advisor and discuss ways to lower your risk.
The Dow ended with a loss of 128 points Friday to close at 11,100. The S&P dropped 13 points to 1,239. And the NASDAQ Composite lost 18 points to 2,239.
Declining issues led advancers by a 2-to-1 margin. NYSE volume topped 6.5 billion shares, while the NASDAQ stock market saw trading of 2.3 billion shares.