Dow Jones Plummets 531 points Doom and Gloom or just a false Alarm?
You may be wondering, so what, why do I care, I don’t have any investments in the Down Jones, heck I don’t even know what that is.
Well let me share with you that you better know, as it effects you, your family and everyone you love and care about, and in this post I will give you some insight into why.
After the death cross last week, the Dow Jones lived up to history and expectations and dropped a whopping 531 points today, sending the world stock markets into a panic. Coupled with the Greece shenanigans, a sharp decline in the ASX (Australian Stock market) on the back of the Chinese market collapse and the devaluation of the Chinese Yuan, many economists are signalling the next major market correction or crash is upon us sooner then expected.
Let me be clear, I am no economist, financial guru or politician, but what I do understand is Newton’s law of Motion “that for every action there is an equal and opposite reaction”. I also understand business and the global crisis we face in the coming weeks, months and years ahead due to short term planning
So let me explain why the dow Jones dropping like a rock in a pond may effect you
If you don’t know already the Dow Jones is ww.investopedia.com has a great 90 second video you can watch here What is the Down Jones.
Basically if the down plummets, the whole world takes notice and as Newton’s law of motion states, there is an equal and opposite reaction, will that be a complete stock market crash, or just another bump in the road for an already fragile global stock market?
That I am not here to tell you, what I want you t understand is why its important to understand.
Simple Math – Global Stock Market Crash = Global Recession
You may think, well thats the American stock market, how does that effect me in Australia, the UK, Europe Russia or even South America right?
Here is my simple and humble economic math
- The Dow Jones falling may be the start of total market correction aka Crash
- The Dow Jones plummeting sends a message of fear and uncertainty on an already fragile global stock market
With most once economic superpower economies already fragile, this could be the straw that breaks the camels back globally
A global stock market crash may (most likely) lead to a global recession, which would lead to
- Companies will cut costs and axe staff
- Unemployment rising like a thermostat at sunrise on a hot summers day in the dessert
- The unrevealing of countries economies that are already over extended ( i.e. most countries)
- Your retirement fund, 401k , IRA, Superannuation etc may be cut in half just like the crash of 2008
Basically, not a good outcome and thats why if you think, just because you don’t have investments in the Dow Jones, you still need to be aware of what a drop like today’s means, as it very well could hit close to home in the coming weeks and months ahead. Wether you understand it or not, the Stock market has a direct or indirect impact on you and your family.
The question on everyones mind is, is this Dow Jones stumble the start of the market correction, or just another road bump in the already bumpy road?