Skip to main content

Posts

Showing posts from October, 2013

The Federal Government Shutdown

A client came into our office yesterday morning unannounced and wanted to know if he should sell all his investments due to the issues going on in our federal government.We asked the client if he needed all or a majority of his money in the near future.His response was “absolutely not”.Our response to him was that no matter how dire the current situation seems, in the grand scheme of history, the financial markets and life, it is but a tiny blip and we shouldn’t react to short term news, especially when it has to do with our politicians! We have been here before, we will be here again and we will always have a government (and if we don’t you will not need financial assets anyway) and therefore, over the long- term, short- term issues like this will not be significant.

The following charge averages the last 17 government shutdowns, plotting the average S&P500 performance 20 trading days before the shutdown and 60 trading days after.As the chart shows, the stock market (as measured …