Listen to WSB Money Matters host Wes Moss’ interview with WSB Radio’s Edgar Treiguts.
“Sell offs…people get very scared very quickly and everybody runs to the exits at the same time, that is just the nature of being a long-term investor. Just because we have a bad day, week, month, doesn’t mean we’re going to have a bad year or five years.”
Those words from WSB Money Matters host Wes Moss, after U.S. stocks took it on the chin Monday/ The Dow had its worst day of the year, losing 767 points – nearly three percent of value. The Nasdaq Composite – effectively representing tech companies that could be most affected by a trade war with China – lost nearly three-and-a-half percent of value.
China began the week by devaluing its currency – the yuan – to fall below its 7-to-1 ratio with the U.S. dollar. It’s the first time in a decade for that move. China hopes a weaker currency softens the blow it could take from U.S. tariffs.
Wes Moss says that may work for China in the short-term, but could very well hurt the country in the long term view. “If you are doing business in China, and you effectively have a currency that continues to go down in value, what happens then is people take their money out of the country. Billionaires, millionaires, companies…they say look, I’d rather have my money in the United States,” says Moss.
There is a threat for harsher tariffs against China to come possibly next month. U.S. consumers possibly on the hook to get hit hard.
What Moss predicts will eventually happen: “Potentially less reliance on China. More and more companies choose to do business in other countries around the world, and we do some sort of a trade deal. So a combination of the two get us to some sort of a resolution.”
Originally featured on WSB Radio. Read the full article here.