The U.S. economy has experienced numerous troubles throughout the summer – the debt ceiling crisis, downgrading of the federal credit and falling stock prices. Despite this, various experts in economics are saying that investors should not believe the troubles will be a long-term trend, according to the Washington Post.
The news source reports that panic among consumers and investors may lead to adverse consequences in the long run. Those who withdraw from investments in favor of savings accounts, for example, may end up losing money due to future inflation. Transferring money from investments to bonds can lead to similar risks.
A major economic trouble that initially seemed daunting but reversed fairly quickly was the 1,370 drop in the Dow Jones industrial average that occurred in the week following the September 11, 2001 terrorist attacks. The Dow recovered within three months.
Ernest Burley Jr, owner of an insurance and financial services firm, confirmed the market’s capacity for recovery.
“Look at the market’s performance over the past 100 years – through recessions, depression, wars, bubble bursts, et cetera. It always recovers,” Burley told the news source.
The Associated Press reported that solar companies have been one of the only industrial sectors to experience notable increases in their stock prices this week.