The stalemate over the federal budget and debt ceiling in Washington, D.C. has put the markets on edge and generated a lot of scary headlines. We are following events very closely, but we can make no certain prediction of the short-term outcome. We do know that if Congress does not raise the debt limit by Oct. 17 a technical default will occur and the effects on the markets and on the economy likely will be harsh. We are also very confident that no matter what happens, sometime in the not too distant future markets will be higher than they are today.
We don’t recommend making changes to your portfolio due to short-term political events. Although things could get worse before they get better, we believe that it is very difficult to time moves out of and back into the stock. You are just as likely to miss big gains as to avoid big losses. For those of you who have been with us through the last 12 years, you know how important it is to avoid timing the markets. For our newer clients who have only seen sunny skies, please know that “staying the course” is always best during turbulent times.
