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    Posted October 6, 2015 by
    jdesmarais
    Location
    York, Pennsylvania

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    What Does the Future Hold for U.S. Investors

     
    With China’s recent market meltdown still in progress, the world waits to see how this will play out. Many are wishing they had a crystal ball, but financial professionals are cautioning investors not to panic. The global economy has changed so much over the last decade, and the experienced investor has been down this road before. Savvy investors understand the indications and know how this can affect an individual’s portfolio, and yet they also know that these cycles in market activity have almost become predictable.

    Stephen McNamara at McNamara Financial in York, Pennsylvania believes that these events are becoming the new norm for the investment world. “During the last 15 years, some of the largest swings in the stock market history have taken place. It appears that this type of activity is becoming the new normal for investors. In understanding the angst involved with watching the Dow close down over 500 points, it’s tough to internalize. And yet, if everyone just stops and take a deep breath before reacting, the markets should stabilize and make a full recovery.”

    McNamara is quick to point out that though investors lost money in the 2008/2009 crash, those who stuck with it and didn’t sell off were rewarded. In most cases, investors who stayed in were able to recover their losses and earn sound profits over the next five to seven years. The market corrects itself from time to time, and in fact financial professionals remind investors that market corrections are actually healthy.

    Though the U.S. stock market has seen some volatile days of trading, global markets are also affected. In fact, the sell-off was triggered by China’s Black Monday, which occurred on August 24, 2015 where billions of dollars were wiped out overnight according to Forbes Online. The markets in Asia, the UK and the US were all affected, and investors are still concerned about what the future may hold. Many say that every cloud has a silver lining and in this case, the silver lining will be that the U.S. will not increase its interest rates anytime in the near future. The Wall Street Journal recently affirmed that the Feds would not raise interest rates at this time and this is good news for consumers.

    China has been a huge player in the global economy for over 20 years and today is the second largest economy in the world. According to the Financial Times, in Beijing, things have been looking bad for some time in spite of the government’s attempts to refuel the economy. Some commercial building projects have slowed down and others have simply been abandoned as the Shanghai Index continued to lose value. Signs of weakness in China’s manufacturing sector have been downplayed as the Chinese government has moved quickly to support financial growth and minimize damage.

    Fortune magazine notes that top wealth managers are saying that the recent events are highly reminiscent of the October 2008 recession. Though most agree that it does feel a little like 2008/9, this is not the time to be driven by fear. The U.S. policy makers are working to avoid another crash like the one in 2008. For those who have forgotten, on September 29, 2008, the U.S. House of Representatives said no to a $700 billion bank bailout scheme that had been designed to restore the banking industry across the United States. This action resulted in the Dow dropping tremendously and obliterating $1.2 trillion in market value.

    U.S. investors simply want to know how these events will affect their portfolio. Stephen has some advice on that front: “If nervous about your investment portfolio, then talk to a financial advisor and get professional advice. Wealth management professionals have the skills and resources to provide reassurance or make useful suggestions about diversifying. It is important to mention that selling off stocks during this time only locks in losses.”
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