Dow tanks 767 points — NJ financial expert says don’t panic

Nervous investors in New Jersey and around the world are wondering what happens next after stocks took a nosedive on Monday, amid fears of an escalating trade war between the U.S. and China.

The Dow Jones Industrial average dropped 767 points after the Chinese government devalued the yuan and President Trump called China a currency manipulator, sparking concerns about a currency war that could significantly weaken American purchasing power and lead to a global economic slowdown.

Other markets dropped as well, with the Nasdaq closing down 278 points while the S&P 500 dropped 87 points.

So what’s the best way to react to the volatility?

Ken Kamen, the president of Mercadien Asset Management, said if you have a balanced portfolio, there’s no reason to panic.

“Right now, corporate America looks very good, and the consumer is still very strong,” he said. "We’re getting geo-political noise rocking the market so you can’t let that get you off your long-term game plan.

"Volatility is what investing is all about. As a matter of fact the definition of investing is managing risk, so to think that the market is going to have a straight run up and not get corrections like this would be foolish on someone's part.”

He stressed “sometimes the best thing to do is to sit on your hands and do nothing. We’re all just one tweet away from the market going up or down.”

Kamen suggested there may in fact be a silver lining here.

“It seems that the new markets we’re in, we get these big blow-offs of 800, 900 points, and then we seem to get back off to the races again," he said.

Kamen stressed while stocks tend to have big gains and drops lately, overall the market continues to climb, and “the alternative is taking your money out and earning something like less than 2 percent, so over the long term I think good quality equities with a high dividend could be a very good place to be.”

You can contact reporter David Matthau at David.Matthau@townsquaremedia.com

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