Newspaper article The Florida Times Union

How China Can Affect Your Retirement

Newspaper article The Florida Times Union

How China Can Affect Your Retirement

Article excerpt

Byline: Don Capener

Nearing retirement and worried about your 401(k) or investments? You are not alone.

After the late-summer correction in the stock market, I've wondered myself if I will need to work three additional years to hit my target of $1.7 million saved. Why that number? It's based on my projected life expectancy of 85 and maintaining my current lifestyle.

While I'm not providing anyone professional investment advice, I'm fascinated how everything is getting more interdependent. Factors such as the Chinese economy can and will affect your ability to make a good return on your stock investments. As you have heard before, diversification is critical.

Below are five factors worth considering in regard to investments, especially if you are nearing retirement:

- Volatility will continue - The current panic and volatility in the stock market began last month when China did a surprise devaluation of its currency. Everyone knew China's economy was slowing down, but the devaluation of its currency was a red flag that China's investors are very concerned that their annual growth rate of 7-9 percent can't continue, and that their 2015 slowdown could be far worse that we thought. As the world's second-largest economy, investors are increasingly fearful that a faltering Chinese economy could pull much of the world down with it.

- Global Impact - Stock markets around the world recorded dramatic declines in August and September. The Chinese stock market was down 40 percent Aug. 24. I compared August and September to past drops. Aug. 24, 2015, provided all of us with the biggest scare in recent memory - the worst point drop for stocks since October 2008 during the height of the Great Recession. The Dow Jones Industrial Average shed more than 1,000 points in early trading Aug. 24. But compared to the 40 percent dip experienced by Chinese investors on the same day, our portfolios should recover.

- Stocks are not for the faint of heart - Consider diversifying into real estate, fixed income products or simple money market accounts. This is even though the "Black Monday" panic on Aug. …

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