We are sure that you have been following with concern, the political drama and folly unfolding in Washington around the issue of raising our nation’s debt ceiling. At this moment it is not clear when or what the final resolution will be, but the negotiations will be staged daily to highlight the drama. Markets and the news media will certainly react to these events and will continue to react until either a deal is reached, or the August 2nd deadline passes, August 3rd, August 4th and so on.
We understand your concern on how this particular crisis will impact you and your investments. Unfortunately, neither the various pundits in the media or any of us possess a crystal ball to allow us to divine what will happen to the financial markets over the course of the next few days and weeks.
Since we can’t glean the future, we use “Functional Asset Allocation” and “Endogenous Risk Analysis” as the basis for your investment strategy. Your asset allocation is determined by your short term cash need and long term goals. Uncertainty and risk will always be part of investing. Your portfolio contains stocks that are invested in domestic and international markets, both developed and emerging, and are comprised of thousands of companies from small to large. Fixed income assets are invested in CD’s, money markets, savings accounts, U.S. savings bonds, bonds and mutual funds with global exposure.
We believe that the work we have done together, prepares you for the risks inherent “every day” in the market, and also prepares you for whatever may happen as a result of the current debt ceiling crisis. This is not to say that the ride will be an easy one, but we have all experienced the downs and ups before. We do believe, however, that you are well positioned to see this crisis through and remain on track to achieving your goals.
Many of you are familiar with our colleague Bert Whitehead; his blog gives a good perspective on the current situation: http://bertwhitehead.blogspot.com/
As always, we are available to discuss this or any issue, (If anything is keeping you up at night you should be calling us first thing in the morning).