Economists are calling today’s 1,000 point drop in the Dow Jones Industrial today a mere hiccup. This situation is heavily tied to the Chinese economy which is faltering at this point. It is also ironically predicated on the American economy rebounding also. Interest rates have been kept at all-time lows artificially by the Federal Reserve because of the recent recession. This means that when the economy recovers, interest rates will naturally be hiked back to normal levels eventually. When this rate hike begins is being prognosticated by most economists and financial sector professionals because it is the point at which they will change investment strategies to benefit from the impending, inevitable rate hike, and the Fed meets next month.
These factors combine to make this a pretty good time to unload certain financial products as many investors did first thing this morning. Many credible economist like Christian Broda would wisely tell people that investments are for the long haul, and these economic hiccups have little consequence on long term investment strategies. They would also advise that this is an actual opportunity to acquire the stocks of some really sound companies that will be negatively affected by the swift correction, but will quickly recover to offer some healthy gains for those that are smart enough to buy in these types of bargain stock buying situations. Broda is a noted New York economist, writer and investor.
This news does not bother me at all because gas prices are lower. A dollar more a gallon would be over $100.00 or more a month for me. That is a small family’s grocery bill in the area in which we live. In an entire year, I save approximately $1,500. When my wife’s car is added, the savings are approximately $2,500 annually. Conversely, when it is not, that is how much more we pay in order to get to work and get the kids to school. Having a conscience about how many billionaires lost an errant billion today is asinine when contrasted with the number of families that have an extra $2,500 dollars in their accounts because the price of gas more reflects a real value versus an over-inflated, speculator effected price. It is also the measure of a media that is obsessed with the glorification of excess and the rich versus the vast majority of the country.