Dear Doctor Business,

I am a long time follower of yours and I love the new blog. Your expertise and ability to breakdown complex business and economic ideas for little old lay-ladies like me is much appreciated.

I am concerned about how the Chinese market crash will effect my stock investments. Can you recommend a stock type that is more impervious to such global treacheries? Is this crash the result of not buying American? And will investing in American companies through the stock market help boost the American economy and save us patriots from being burned again by foreign economic issues?

Sincerely,
Abigail from Texas

Hello Abigail! Thanks for writing in!

The current stability in foreign markets is something to be concerned about, for sure. The stock market is unfortunately vulnerable to daily fluctuations based on the smallest of disasters. But there is hope, Abigail! If you were to look at the market on a longer term, you’ll see that there is quite the different picture. Today, the Dow Jones is over DOUBLE what it crashed at 7 years ago, and hopefully, with a bit of finesse in the financial markets, may see that number still grow in the upcoming years. Whoever our next president is HAS to focus on these economic issues.

For a steadier investment, I would recommend gold. Gold has a much better financial outlook especially during uncertain times. Something to think about, but I should probably dedicate a much longer post to the advantages of precious metals. Soon!

And finally, it is, of course, imperative that we buy more American goods, but I would suspect that the Chinese crash had more to do with people no longer buying Chinese! China right now is locked in an odd middle-ground in terms of its own growth. Its industry simply cannot compete with the quality of American-made products, AND YET, it’s now facing a challenge where it’s losing control over low-cost manufacturing by being underbid by other south Asian countries like Indonesia and Thailand. Even Malaysia has been industrially undercutting China for a while now.

My advice is to see how this month shakes out. If you’ve noticed that the Dow Jones ended today in its biggest day in 4 years! With any luck, we’ll be able to look at the last few trading days and laugh.

-Doctor Business

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