Global Impacts of Shifts in the Chinese Market – Fear or Fallacy?
While globalization brings a host of benefits to us all on a daily basis, the far-reaching nature of its effects can often also deliver headache, drama, and panic, particularly at the financial and economic levels.
For example, when China closed its markets in each of the first four trading days of the New Year as a result of a rapid drop in share prices, investors immediately panicked for fear of being trapped in stocks whose value is plummeting. The reverberations of these decisions to close the markets in China were felt strongly here in the U.S., with stocks dropping 4.9%, the worst first-of-the-year drop in history.
So, what does this mean for your long-term financial goals? Is this a harbinger for what is to come in the global financial markets as 2016 progresses?
…most importantly – are American companies losing value because of panic in the Chinese market?
Well, while the future is impossible to foretell, one thing is certain. As of now, there are no major economic disruptions in the U.S. market that would legitimize a panicked reaction. While it remains to be seen whether the global markets are ushering in a correction phase that will result in even lower stock prices, or if a more grave effect, such as widespread drops in valuations will take place, we’d advise you to take a seat and watch the market activity unfold, without too much worry placed on events like the recent case in China or what TV pundits are saying.
As our several decades of experience show -the only real constant, in life and the global stock market, is change, so it’s best to buckle up for the ride and to not be afraid of some bumps along the way.
With this in mind, it is more important than ever to devise a strategic plan for your near and long-term financial goals, as well as work with us to learn about additional alternatives that may deliver top value for you amidst a largely uncertain market. Remember, our fee-only fiduciary investment advisors have your best interests at heart, and we take pride in our expertise and commitment to helping you reach your goals, now and into the future!