Stock market sell-off worries investors


There was a big stock sell-off on Wall Street Monday. 

At one point the Dow was down more than 450 points, and there was more of a significant drop in China.
The market recovered somewhat, but many people are left wondering if this is the beginning of a major downturn in 2016.
So, is it time to hit the panic button?

Not yet.

While many people, including some of the richest people in the world, have been warning of a big stock market correction, one bad day doesn’t signal that it’s here.

Monday morning the market drop was triggered by a sell-off in China.  The sell-off in China was because of a negative manufacturing report.
China’s economy has been faltering for some time now, but analysts say the economy is still quite strong.  The United States is tied to China in a world economy, but there is no indication that America’s stock market is on the brink of a major correction or plunge.

“It’s very difficult to predict in the short term what type of impact China will have,” according to Christopher Jones, Certified Financial Planner.  “It’s an important economy, but like any short-term impact — it goes away. Long term is what we need to focus on. Short term viability is common in every market.”

However, stock brokers have an old saying: ‘As January goes, so goes the year.’ Hopefully, Monday’s stock sell-off isn’t an indicator of the rest of the month.

U.S. stocks have finished the year in the same direction as January 72 percent of the time.

The sell-off was so steep in China — trading was halted.  It’s the first time that’s ever happened.  The Shanghai Composite was down 7 percent, that is pretty significant.

By comparison, the United State’s S & P was down 1.5 percent and the Dow ended upside down 276 points.

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