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Investor Advice for a Possible Government Shutdown

September 27, 2023
Brian J. Murphy, CIMA®
Senior Vice President, Chief Investment Strategist
[email protected]
(585) 419-0670 x41933

Potholes in the long road

Political dysfunction is not anything new, here in the U.S. or in any other country. But adding to the issue is the fact that congress, like our country, is very narrowly divided, leading to an environment where just a handful of malcontents on either side can cause significant disruption in the day-to-day functioning of government.

Congress has until September 30th to pass the necessary spending bills to fund the government, or a continuing resolution to buy themselves more time. If they fail to do either federal workers will begin missing paychecks, and others in nonessential areas may be furloughed. Aside from the financial disruption that takes place for the millions of workers affected, this creates a financial drag on the U.S. economy.

So, the question is whether investors should react by making changes to their portfolios or doing anything different with near-term financial decisions. The answer is no. These dramas have taken place in the past, and will likely continue to take place, potentially with more frequency, going forward. But just like past episodes they are short-term issues, potholes in the long road of investing. Serious investors with well thought out long-term goals should not be distracted by short-term problems. Take heart, since 1980 there have been fourteen government shutdowns, and over that period until the end of last month the S&P 500 has returned a cumulative12,794%*.

*Source: Zephyr Analytics/Informa