What happened to the market in the last US government shutdown?
Fade the fear when it comes to events like this
Whenever I see something like this, the first thing that always comes to my mind is Jim Rogers' quote: "Buy value, sell hysteria".
Fears of the worst that can happen in general are often exaggerated and in turn fear drives the market until it realises that hey, what's the worst that can happen. Think back to the whole Ebola case that hit the market back in October 2014.
Given the current economic situation, investors can surely weather a temporary shutdown in the US government - as they also did back in 2013.
When fear comes in, asset prices fall and we saw a dip in the S&P 500 - but it recovered before the end of the shutdown and went on to post yet another record year back then.
So yeah, when everyone panics, stay calm and look for value - more often than not things aren't as bad as they seem. But that doesn't mean one must not be complacent, prolonged discussions that fail raises the odds that we'll see more difficult challenges ahead for Trump in terms of trade talks, and of course the mid-term elections at the end of the year.