Possible U.S. Government Shutdown
This was on the Financial Post on Wednesday. According to the paper, there's two scenarios, one with limited impact and another could be devastating. So what can this mean to an investment portfolio? If we look at the worst case scenario. It talks of debt default which could hurt your bond holdings. Not only that, stocks would probably plummet as well. You can look at this as the sky is falling or an unprecedented opportunity to buy cheap assets again. U.S. companies are currently awash with cash. You can see how investors are buying up U.S. stocks now by just looking at the S&P500 chart. S&P 500 - 6 months ending April 7, 2011 Aside from a small dip in late March, probably due to the reaction in what happened to Japan. The S&P500 continues to go up. I has been going up since March 9, 2009. You've heard of bad news during this time like the double dip in the U.S. housing market and unemployment. But why does the market still go up? It's because w...