Will The Government Affect Your Investment Decisions?
There should be no surprise now that our government is dysfunctional. It doesn’t matter which party you relate to, because anyone with common sense can see that we have a serious problem with our elected leaders. If you want to really know how I feel about the subject, you can read my previous post about how the government needs to grow up. This post is going to be a little different. I want to talk about how these government issues are affecting my investment decisions and how it might be affecting yours.
My Investment Strategy
I am a relatively young person and because of this, I am what you call an aggressive investor. I carry a lot of stocks along with some other forms of investments. The reason why I do this is because I have many years before I actually retire. I can handle the many ups and downs of the stock market. As I grow older, I will pull back my aggressive approach toward a more moderate, then conservative approach. I find this works best for me and I understand how and why I am doing it.
Since I invest my Roth IRA with Betterment, making my aggressive strategy work is super easy. I have even done this same approach with my 401(k). I was lucky to find some packages with my 401(k) provider that made aggressive investing much easier. You will need to check with your provider to see what you can do depending on your investment strategy.
How The Government Actions Affect My Investing Decision
I am certain there are quite a few of you out there really wondering what is going to happen with the government and how the stock market will react. I am certain that the stock market will react, but I never know which way it is going to go. If I knew that, then I probably wouldn’t need to work. I do check stock quotes and how the market is doing with services like Quotenet. This gives me some insight in some stocks that I might want to add or dump, but it doesn’t move my overall investment strategy.
There have been many news organizations trying to figure out whether the stock market will react in a positive or negative manner with the current shutdown and the ever looming debt ceiling. I am sure that most realize that the investor impact is unclear.
Since no one really knows what is going to happen, my plan is to do nothing. I plan on continuing my investments and my account funding. Even if there are a big drop in the stock market, I won’t take money out. Why?
I don’t invest with my emotions. If I allow my emotions to take hold of my investments, then I probably wouldn’t have much money in my accounts. Emotions cause you to make irrational decisions, especially when it comes to money. When situations such as our government falling apart, it can be very emotional. When you starting thinking about it, you will probably move your investments or stop investing. I don’t recommend this.
Unless you are close to retirement or you don’t have a very diversified portfolio, then I would recommend that you sit on your investments. Don’t let your emotions get the best of you. If you are angry with your government officials, then tell them about it in the ballot box. Don’t let their actions hurt your investments. The stock market will go up and down over time. It is a wise investment decision to just hold and ride it.
I would love to hear what you plan on doing. Will you wait and see, then make your decision? Will you continue to invest and just let it ride the ebbs and flows of the stock market?