Wall Street Steward Blog

Take a Deep Breath

Hi folks…I know you are scared. You are scared about the government shutdown, and what it might mean for your money. How do I know this? Well, lets just say that managing money for over 400 families helps me keep my proverbial finger on the pulse of mainstream America.

The truth is that, in the long run, this will likely be just a blip on the radar.  However, I know that doesn’t make you feel any better while it is happening. 

There have been 17 government shutdowns since 1970, and the stock market impact has been minimal. I can get the charts and graphs, but I would rather refer you to the site that published them last week. "Here you go":http://www.ritholtz.com/blog/2013/10/market-performance-government-shutdowns/.

Let us examine the impact thus far of this shutdown.

The shutdown began on October 1, and here are the performances of a few different asset classes since the close of business on September 30 through 1:15 pm today:

S&P 500:  -1.13%
AGG (bonds):  -.16%
GLD (gold):  -.26%
VNQ (real estate):  -.58%

Folks, this is hardly an international incident.  The markets had gotten ahead of themselves a bit, and many (myself included) thought we needed a pullback.  The government shutdown gave us the reason we needed. 

There is no need to panic.  To change your investment allocation based on a 1% fluctuation would be irresponsible. If a 1% decline is enough to scare you…you should not have been invested in the first place. 

Please don’t let the media work you up into a frenzy. They never let the facts get in the way of a good story.

As always, if you need me, you know where to find me.