US government shut down
The US government just shut down. Again.
Prepare to see endless headlines about mass firings. Shots of closed gates at national parks. And pundits talking about economic fallout.
It will look messy. It will sound urgent.
Some thoughts?
- When it comes to government shutdowns, we’ve “been here, done that” so many times (People loosing jobs due to politics is not fun).
This is politicians being politicians. It’s all theater. No different than the new show on Broadway (just far worse acting).
Here’s the important part…
Stocks usually RISE when the government closes!
This is not the first time Washington has “run out of money.” Since 1980, the government has shut down many times.
Each time, the financial press treated it as if the sky were falling.
Then a few days passed. Politicians struck a deal. And everything went back to normal.
Over 70% of the time, stocks rose during the shutdown. A year later, the S&P 500 was up an average of 15.5%.
So why do shutdowns feel so menacing? Because they hijack attention.
One of Peter Lynch’s most useful lines applies perfectly here: investors lose more by preparing for corrections than in the corrections themselves. The bigger danger isn’t the shutdown; it’s you selling a great disruptor because the news cycle spooked you.
The correct move is to ignore the government shutdown and focus on your long term investment strategy. That’s how you make real money.
Remember, the real risk isn’t the shutdown. It’s letting headlines push you into selling great businesses. Ignoring the noise. And focusing on great businesses.
Busy And Useful 