2013 has been a banner year for Wall Street, with all of the markets surging to record or near-record highs over the past several months.  But the party came to a screeching halt in the past 48 hours, as all of the major indexes endured huge selloffs.  The Dow Jones Industrial Average dropped 206 points on Wednesday, then plunged another 353 Thursday, for its steepest two-day decline since November 2011.  The Nasdaq and S&P 500 indexes also fell by more than 2% each on Thursday alone.  The biggest reason for the sudden decline seemed to be Wednesday's comments by Federal Reserve Chairman Ben Bernanke that the Fed may end its bond-buying stimulus program by next year due to the improving economy.

KTRH Money Man Pat Shinn says this slide is a case of perception overcoming reality.  "The last couple of months the market has had a glass half-full mentality, the last couple of days certainly glass half-empty," he says.  That suggests this has more to do with jittery investors than any actual data.  "Not that much has changed in terms of the fundamentals," Shinn explains.  "Earnings estimates still look to be about the same, corporate profits are looking okay." 

Shinn says this selloff is largely due to investors scared that Bernanke and the Fed will pull away the so-called "punch bowl" of stimulus that has flooded the market with cash in recent months.  "I think the market has been on edge, laser-focused on anything that would sense all of this quantitative easing would come to an end," he says.  Thus, he sees this as more of an emotional hiccup than the start of a new market trend.  Shinn notes that the market is still more than double where it was when the recession ended in 2009, and the past two days are no cause for panic.  "That's what scares everybody, it's like uh-oh, is this another repeat of 2008, and the answer would be no."

Listen to Money Matters with Pat Shinn Saturdays at 6 p.m. on Newsradio 740 KTRH