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Just five minutes into trading this morning (Monday), the S&P 500 tanked 7%. The sudden drop prompted a 15-minute trading halt.
The Dow Jones Industrial Average cratered more than 2,000 points (7%) at sessions lows, while the Nasdaq also shed more than 6%. It's the worst single-day drop for U.S. markets since the height of the financial crisis 11 years ago.
With today's drop, we're very close to hitting a bear market in 2020.
A "bear market" is defined as a 20% drop from market highs. The bear market level for the S&P 500 is near 2,700 points. At today's lows, the S&P 500 hit 2,752.
If the markets open down on Tuesday morning, it's very likely we'll hit that bear market line. That's a big deal, since the average bear market lasts 18 months.
The most important thing to remember right now is not to panic. Today, we'll show you how to protect your money.
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First, here's why the markets are selling off so quickly this week. It's no longer just fear over the spread of the coronavirus…
Here's Why We're Headed Toward a Bear Market in 2020
Fears of the spreading coronavirus have hammered the markets for weeks, but today, a collapse in oil prices is accelerating the market's sell-off.
Saudi Arabian officials launched an oil price war with Russia over the weekend, sending crude prices plummeting. On Monday, Brent crude prices tanked 26% to $33.49 per barrel. It was the worst one-day sell-off for oil since 1991.
In an attempt to recapture market share, Saudi Arabia slashed the price of its April oil contracts between $6 and $8.
The surprising announcement sent shockwaves through global markets that were already reeling from coronavirus fears.
While market drops like today's are nauseating, the last thing you want to do is panic.
"The absolute worst thing you can do is make important decisions when you are overly emotional (i.e., are panicking), have incomplete information (we don't know how this mess is going to work out) or haven't fully thought out the moves you're making," Money Morning Founding Editor William Patalon, III, said. "Clearly, the investing masses are freaking out – and I'm talking at all levels, from Wall Street to Main Street. Don't succumb. Keep your cool."
As always, maintaining a disciplined investing approach is crucial.
Here are three steps you can take immediately to protect your money from any additional selling…