So, Is Evergrande A Big Deal?
Yes, from a business perspective. Lots of money will be lost if the company goes bankrupt, and there may well be damage to Chinese markets and the Chinese economy. Will it affect the U.S. investor? It might, to a minor degree, as any significant bankruptcy around the world might. But will it disrupt the Chinese financial system as a whole or even the global system? Right now, that possibility looks extremely unlikely. Hurricanes can do damage, but for U.S. investors, right now this looks like a hurricane on the other side of the world—scary and damaging, but not a significant threat to us.
As always, pay attention, but keep calm and carry on.
Brad McMillan is the chief investment officer at Commonwealth Financial Network.