China’s Shaky Economy Has Investors On The Fritz
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Politics and Activism

China’s Shaky Economy Has Investors On The Fritz

Stock market dip—made in China.

China’s Shaky Economy Has Investors On The Fritz
Carlo Allegri / Reuters

Summertime and the livin’ is uneasy.

Monday, Aug. 24 marks the day that sent the Dow Jones industrial average down a whopping 1,089 points, just following the opening bell signifying a new day in the Stock Exchange. If you’re anything like me (allergic to numbers and the idea of the stock market), you’re probably wondering what this means. In layman’s terms, the global economy is possibly in trouble.

In a recent attempt to lower the value of their currency, China has basically freaked everyone out. While China claims to have devalued the Yuan in order to make their currency more financially competitive with other countries’, the backlash has caused rise to some concern. Will other countries retaliate, lowering the value of their own currencies? Will lower export prices create more competition between American and European markets? And how does this tie in to the American dip in stock value shown Monday?

With the presence of financial uncertainty in the air, investors are quick to pull their money in fear of losing a good chunk of change. Too much panic results in lower stock prices, which then opens the door for more fear. In the end, as long as investors stand firm on their investments, the stock market should be fine.

The small correction seen Monday should raise some eyebrows and keep shareholders on their toes to the fluctuating market, but the recent dip does not signify the next Black Monday. On Oct. 19, 1987, the stock market showed a 22.6 percent decrease, making Monday’s 6.6 percent decrease seem like nothing but a hiccup compared to investors’ historical worst nightmare. Additionally, within hours of the initial plummet, stock prices climbed their way back up showing some resilience in the system.

American stockholders should rest calmly with their faith in the system. Stock trading is a gambling game. When you get involved, you have to expect to lose some before you can win some. It’s the dicey decisions that have the potential to send us spiraling back into a depression.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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