Author: Ellen Chang
Investors should avoid reacting to the first government shutdown in 17 years by selling off their equity holdings, investment advisors said.
Instead, some investment experts recommend that investors ramp up their holdings and take advantage of any dips in the market by adding equities and gold to their portfolio.
The current government shutdown should not be viewed as a threat to the financial markets, said Bill Peattie, founder of Peattie Capital Management and a portfolio manager on Covestor, a registered investment advisory.
The market will perform well over the long term as the economy rebounds, he said.
"Longer term, even with the onset of tapering sometime in the next three to 12 months, there is still enormous liquidity in the system and reasonable valuations in a number of parts of the market," he said. "On balance, global economies are improving, albeit slowly and sporadically."
The stock and bond markets have reacted positively overall to the past 17 shutdowns since the current budget process started in the 1970s, said Bill Stone, chief investment strategist of PNC Wealth Management.
Since it is unlikely for the shutdown to occur for longer than a brief period, investors should expect only to experience "short-term volatility" in the market, he said. ...