Monday, August 24, 2015
Today we’ve seen some of the worst decline in years as people lose faith in the market and rush to sell, hammering major indexes, with the S&P 500 losing nearly 6 percent last week, it’s worst weekly slump since 2011. The Dow took a big hit, at times down 1,000 points.
This has been mostly fueled by the crisis in China, with the economy slowing down globally but most of all China’s inability to find ways to regain people’s trust in their market.
The U.S. Dollar has lost ground to the Euro and chances of the Fed increasing interest rates are pretty low. Although oil has reached record lows under $40, gold and silver have gone up, the typical shelter during times of trouble.
So how bad is it really? It’s bad, but not terrible. You could even say it was a good time to buy, “"blood in the streets" type of situation. The market is in a way adjusting after a perhaps unreasonably high period and on the long run this adjustment may bring parameters back to reality rather than keep inflating the bubble until it pops. People sometimes forget that its both a bull and bear market.
It is important to keep calm, diversify assets so as to compensate any shift of power, and keep an eye both on the Chinese stock and the US economic growth. Any red flags you should notice, that’s the direction where you’ll see them pop up first.
Fernando “FerFAL” Aguirre is the author of “The Modern Survival Manual: Surviving the Economic Collapse” and “Bugging Out and Relocating: When Staying is not an Option”.