August 24 saw the stock market of the world’s second biggest economy take a significant hit. In fact, conservative news outlets in China dubbed it as “Black Monday.” The fall dragged down and wiped nearly $5 trillion off global equity markets.
Washington, DC area asset management company AOG Wealth looks at how this affects you and your investments.
The Great Fall of China
With greater opportunities come greater risks. Crises across the globe can have a profound effect on you even a continent and ocean away.
- Operations may come to a halt: Many of the companies you invest in also operate in China. These industrial centers will not escape the devaluation of the Yuan. Unemployment and reduced output are just two of the adverse effects that come with this fall. While this big plunge is not catastrophic, it is worth noting nonetheless.
- Commodities investment will take a hit: The slowdown of China’s economy has had a profound effect on emerging economies, particularly those that send copper, iron ore, and coal to the country. That means that there suddenly is surplus of these commodities. Anyone trading them will find lower prices until China resumes external purchasing.
- Exports/imports are affected: That lowered reliance on products outside of China extends to restrictions on their imports of goods and supplies from other nations. This is particularly a blow for companies who rely on imports and exports.
What these three things highlight, however, is a need for awareness among investors, regardless of location.
What Can You Do?
The swings of the Chinese economy are not a reason for alarm or to make rash financial decisions. Here are some tips:
- Consolidate what you have: Even if you have investments that were exposed to the Chinese market, part of smart Washington, DC area asset management is to assess what you currently have. If you took some losses, focus on meeting your needs. Set aside money; cut away any unnecessary expenses. This way, you will have an idea what you have left to work with.
- It can be good to give: Taxes can eat into investment gains. Try to max out on your contributions to your favorite registered charities. This reduces your taxable income and lightens your tax bill.
- Hire a professional, personal wealth manager: At AOG Wealth Management, we take can alleviate any worries you have about foreign markets swings and help you focus on your financial future. We can actively monitor your investment portfolio and help you adjust according to your own risk/reward profile. This allows for efficiency in handling your assets and finances, which is essential during times of crisis.
History has proven that financial market bumps pass, and those who do well during these bumps are the ones who stay focused on their long-term goals. Hire AOG Wealth and we will provide you with the best in small business, asset, and wealth management. Give us a call today.