Denver Financial Advisor: 'Why This Panics People? I Have No Idea'
DENVER (CBS4) - As U.S. investors are now painfully aware, trouble in the Chinese market is really hurting U.S. stocks as the Dow Jones Industrial Average fell nearly 600 points on Monday.
While your 401k has probably taken a beating lately, the news isn't all bad from a consumer standpoint. Experts think the market meltdown will convince the Federal Reserve to hold off on raising interest rates, and that's good news for homeowners and buyers.
Also on Monday oil prices fell hard again. That should translate into even lower prices at the pump. If oil prices stay where they fell to Monday, experts say prices at the pump could fall below $2 a gallon by Christmas.
After the Dow plummeted more than 1,000 points in just minutes Monday morning not every investor lost hope. Stephen Stribling is a financial advisor at Morgan Stanley in Denver. He says despite the volatile day on Wall Street the U.S. economy is continuing to grow, especially in Colorado.
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"You look at housing prices, they're up 4.4 percent on a (national average). Denver is much, much higher. It's number one in the country right now on house sales," Stribling said.
Monday's wild sell-off included a hit to commodities. While it's unfortunate for those in the industry, it benefits the consumer.
"Look at oil, which broke down to below $40 today. That means yours and my gasoline is going to go down," Stribling said. "We're going to have a lot more disposable income. That's like a tax cut."
And because of the market tumble, it's now less likely that the Federal Reserve will increase interest rates next month.
"So basically we're going from zero to half a point. Why this panics people? I have no idea," Stribling said. "I think if they don't do it this year, then they're going to need to do it sometime next year.
"Don't panic. Make sure that you know what you're investing in, and when things go on sale, buy them."
Economists are keeping a close eye on what's happening in China right now. As for individual investors, many experts advise riding this wave and trust the long-term.
