We are as baffled as anyone by the sheer dysfunction and stupidity being exhibited by the government at this time. It is natural and probably makes good sense for the market to react to this gigantic failure of those who are charged with acting on our behalf.
But, we think that as intermediate to long term investors you need to keep your eye on the ball. It is possible that our elected officials will plummet us into a global recession and constitutional crisis. However, that would seem to be a very distant possibility versus them finding some way out of this moronic impasse. Assuming they do resolve the government shutdown and looming debt crisis, nobody will value any investment a few years from now based on this absurd moment.
Instead, we should keep both eyes on the fundamentals-earnings, earnings growth, dividends, share buybacks, interest rates, etc. Those are what will matter in the long run. As an investor, your job is to filter out all the “snow” that moves markets from day to day and stay focused on what your likely return is from any investment.
By Ted Schwartz CFP©