There's not a day goes by that I don't see some variation of the theme that China is going to crash, or that somehow that nation will blindside us, and that its markets may fall 60%.
This is like saying the U.S. markets were in for a hard landing in March of 2009 after they had fallen more than 50%. Folks who bit into this argument and bailed not only sold out at the worst possible moment. They then added agony to injury by sitting on the sidelines as the markets tore 95.68% higher over the next two years.
People forget that the U.S. stock market – as measured by the Dow Jones Industrial Average using weekly data – fell more than 89% from 1929 to 1932, more than 52% from 1937 to 1942, and more recently experienced a decline of more than 53% from 2008 to 2009 – and that doesn't even account for four 40+% declines beginning in 1901, 1906, 1916, and 1973.
Each was a great buying opportunity, and following those meltdowns, our markets rose more than 371% from 1929 to 1932, more than 222% from 1949 to 1956, more than 128% from 1937 to 1942, and more than 95.68% in just over two years starting in March 2009 – one of the fastest "melt-ups" in market history.
People forget that world markets dropped 40%-80% in 1987. And as legendary investor Jim Rogers noted earlier this month, that was not the end of the secular bull market in stocks, either.
People forget that our nation endured two world wars, a depression, multiple recessions, presidential assassinations, the near complete failure of our food belt, not to mention the deadliest terrorist attacks the world has ever seen, and more.
And guess what? It's still been the best place to invest for the last 100 years. (But that could be about to change. Take a look at the new U.S. dollar report from Money Morning to learn the insidious truth behind America's global depreciation.)
So what if China backs off or slows down?