THE STOCK MARKET IS TANKING. WHAT SHOULD I DO?

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China and Trade

by Mort Collin

China and Trade

STAY CALM. DON’T PANIC. KEEP INVESTING & RIDE IT THROUGH. THIS WILL NOT LAST LONG.

Despite what Joe Biden tells us, the stock market no longer exists just for the rich. Am I right? Does Joe Biden really know what the hell he’s talking about? That’s an emphatic “NO!” Chances are you found this page, because you are part of the middle class. Middle class Americans are contributing in a big way to the stock market nowadays. The 401K has made this possible. More than likely you have a 401K. The desire for Americans to have another retirement nest egg created by not just Social Security revenue and savings accounts has prompted millions to join 401K programs offered by employers. The diversification of investment in 401K mutual funds (multiple stocks) softens the blow of market downturns. In other words, if you’re invested in a 401K, the hit you’re taking today is nowhere near those who own and invest in one, two, three, four, or five high priced stocks.

Free trade is the best trade, but the Chinese deserve this. If you’re angry at the president for this, you can be. This is a free country after all, but he’s doing the right thing. China runs massive trade surpluses with the United States. Moreover they steal our technology and intellectual property. With presidential administrations of the recent past they have run circles around us. Why have they been allowed to do this? China is a nation of 1.2 billion people, but their economy is approximately 2/3s or 67% the size of ours. America is still “big man on campus.” We cannot allow the Chinese to grow their economy at our expense. The 100 year anniversary of the communist takeover in China is in 2049, and they have made it abundantly clear that they aim to be number one in the world in all categories by the time the clock strikes midnight on the morning of January 1, 2049. So what do you do? You take one for the team, for your children, grandchildren, and others of America’s future generations.

China Refuses to Negotiate Trade

The President got lucky when he backed our allies (Mexico, Canada, and the European Union) into a corner on trade by hanging tariffs over them. They acquiesced, because they know and respect American power. China does not, but more importantly, they cannot. A communist regime flexes its muscle to the fullest extent in the face of international pressure. They always have something to prove. They cannot appear weak to their people and the rest of the world. This is why they announced $60 billion in new tariffs today on US goods that they import. Despite being stubborn, they will cave. They will negotiate. They’ll do so, because they are currently in the middle of a recession.

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Should they cave, that’s probably the best scenario for all Americans. However even if they keep these tariffs in place, the stock market will bounce back. The tariffs will become the status quo as time passes and investor confidence will rebound. Your money will come back.

THE DOW JONES INDUSTRIAL AVERAGE: -2.38% (-617.38) to 25,324.99

NASDAQ: –3.41% (-269.92) to 7,647.02

S&P 500: -2.41% (-69.53) to 2,811.87 

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