It’s all over the news. China’s circuit breakers have been activated twice this year, and the year just started. A simple search on ‘China Stock Market’ led me to all these news, and they are pretty recent. With all these news being splashed around the media, no doubt it would cause a big reaction in the market. As investors, I think it’s moments like these that we need to remain calm and ask ourselves, “Should I be afraid?”. What exactly does a crash mean to investors? While it’s easy to see the obvious (Falling stock prices), have we failed to see something more important? As prices fall, apart from market value being taken out, so is risk. I repeat, apart from market value being taken out, so is risk.
Let us not forget that we are in for the long-run and it would be naive of us to hope ......