October 17, 2013
Earlier this month I wrote that historically speaking, government shutdowns often produced little impact on the stock markets; that re-affirming a long-term view of your investment portfolios was the best strategy. Now that the boys and girls in Washington have decided that we'll wait until next year to worry about the debt ceiling (don't you wish you could do this with your mortgage), it's time to review the results of the most recent government shutdown. The charts below show market performance from Tuesday, October 1st (start of the shutdown) through noon on Thursday, October 17th.
Dow Jones Industrial Average
What can we conclude? Yes, there was a sizeable dip in the middle as the shutdown continued and the debt ceiling date inched closer. However, over the past 17 days and all of the media mongering that the world was going to end due to the latest government spat, the Dow was up nearly 1%, the S&P rose 2%, and the NASDAQ hit a new 52-week high on Thursday.
The short-term risk of investing is volatility. Historically speaking, the long-term reward is wealth.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).