On August 24th China’s Shanghai composite index suffered its most dramatic loss to date – a stunning 8.49% that left the international investment community reeling.
Within minutes of its opening bell the Dow dived 1089 points and closed with an overall loss of 588 points – its worst since August of 2011.
Experts attribute this extreme reaction to panic over the uncertain future of China’s economy and investment opportunities in the region. Others, however, remain unconvinced.
Former CEO of Pimco, Mohamed El-Erian told Bloomberg TV that he is “not a buyer that this is the crisis of all crises. Yes, this is a very unpleasant repricing, very unpleasant. And it’s going to go quite deep, but it’s not going to derail the economy in a major way.”
What does this mean for Georgia Investors? USNews.com says that there is “no need to panic.” Even though your 401k may have taken a hit (especially if your portfolio includes household names like Pepsi and General Electric, both of which plunged more than 20 percent on Black Monday) it’s important to remember that stock market volatility is not, on principle, an indicator of overall economic health and is a known risk for every investor.
Despite severe losses, as of September 1 many companies’ share prices have already recovered and are back to their pre-Black Monday levels. See the table below for more information about how some of the largest Georgia-based companies fared on Black Monday.
“Black Monday” Performance for 5 Companies Headquartered in Atlanta*:
|Company Name||Share Price at COB on Friday, Aug. 21||Share Price at COB on Tuesday, August 25||% Change|
|The Home Depot||$116.16||$110.97||– 4.47%|
|United Parcel Service||$99.14||$94.46||-4.72%|
|The Coca-Cola Company||$39.53||$37.99||-3.90%|
|Delta Air Lines, Inc.||$43.60||$41.37||-5.11%|
|The Southern Company||$45.80||$42.50||-7.21%|
*Source: Google Finance