Will Markets Stay Positive with a Negative Market?

Oct. 1, 2013 - PRLog -- For weeks all we heard about was Quantitative Easing and the possibility of tapering and its possible devastating effects on markets and even global markets. This continual bombardment has changed investors behavior recently. For the last few years investors have been long term focus with their eyes off the daily headlines rather choosing to look at overall trends and reports of the economies health.

The recent relentless hitting of headlines and frightening stories are starting to change the longer term focus and flirting with the temptation of focusing on the markets daily. So the question comes up, "Will markets stay positive with a negative government?"

I'm going to make a statement that is very bold and controversial. Even though a government shutdown is scary and we will see news story after news story of how it is affecting certain individuals, a shut down is not as bad as it sounds.

A government shutdown closes the offices of government that are not essential because the government wasn't able to approve a budget for the fiscal year which started today. A shutdown will not affect police, firefighters, and intelligence agencies, but it will probably affect passport renewals, social security card applications, and other rather non essential areas of government. Even the President spoke today that the military would still be paid and operate virtually as any other day. Unfortunately, the Congress members will also be paid during the shutdown.

Shutdowns Happen with Very Little Impact on the Economy

Since 1976 when the Congress made a formal budget process there have been 17 government shutdowns which usually lasted only a few days. The most recent shutdown in 1996 lasted 21 days and many of our government and economical systems are functioning with that event an forgotten memory.

Markets Get the Majority of Their Strength Regardless of Politics

We should never try to time the market or predict the market, we should also never try to time the government and its political leaders or try to predict what the government will do. When it comes to investing, the overall strength or weakness in the market can often be seen regardless of the political environment.

With that long term investment mindset what we can still expect to see short term volatility as a result of the current political environment. Markets hate uncertainty, this was seen slightly by the sigh of relief when markets traded higher as an answer was given about the government shutdown taking place. This short-term volatility will be in part a result of day traders trying to beat the market and by investors running to the sidelines.

Could a Downgrade be on the Way

In 2011 the government threatened to shutdown with a last minute resolution. This however, was not enough for the country to avoid a downgrade from one of the ratings agencies. We are hearing form many so called experts pushing the idea that this current shutdown will lead to another downgrade or a confirmation of the original downgrade by a different agency. However the economy looks much different than it did in 2011. There was no talk of tapering or an easing of some of these government programs but now because of the strengthening of the economy there is a lot more confidence. This confidence leads many to believe that a downgrade as a result of the governments actions will not take place.

We have seen the government shut down before and since our leaders are always worried about the next election we would except this to be a short lived phenomenon. As a result investors with a long term mind set are in a great position for their portfolios to profit as others panic.


Matt Golab was recruited to write a chapter in Tom Hopkins upcoming book, Victory scheduled to be released later this year. Matt also received the Editors Choice Award for his contribution to Victory, not every contributor is selected for this high honor.

Matt is an authority on creating innovative tax and investment solutions to help his clients succeed in their retirement years.  The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him into the national spotlight.

He is often featured in Senior Market Advisor Magazine, a publication which attracts the top financial planners in the country. Matt has been featured in newspapers around the country passing on the principals for a successful retirement. Golab is often asked by national websites that focus on the education of consumers to present his knowledge on the areas of retirement and retirement income plans. Matt is frequently featured in The Wall Street Journal, CNBC, MSN Money, The San Francisco Chronicle,  Newsweek, TheSmartRetiree, Burlington County Times and soon will be appearing nationwide on ABC, CBS, Fox, and NBC as well as USA Today.

Golab is the Author of The Consumer's Guide to Planning Your Retirement: Your Guide to Mental Peace and Financial Well Being. Matt Golab continues to expand the geographic reach of his audience and desires to bring his expertise to a nationwide television audience. Matt emphatically states his mission, “I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market". Contact information for Matt is available at his website,

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