What, Me Panic?  Debt Ceiling Drama

What, Me Panic? Debt Ceiling Drama

May 08, 2023

There is nothing new in the world except the history you do not know.- Harry S Truman

We’ve been down this road before.  If you were an investor in 2011, you may remember a similar threat that loomed over the news cycle and warned of the catastrophe to come if Congress could not agree to raise the debt ceiling. 

There was a lot of market volatility, just like any time doom and gloom seems like a promise from the talking heads trying to fill airtime and their web pages.

I’m not trying to downplay the severity of what could happen if a compromise is not reached and the limit is not raised.

However, a default is not in anyone’s base case.  The stakes are simply too high- it is impossible to see a winner, even a political one, if this happened. 

Americans are split over who would be to blame, and do not seem to appreciate any politicians using our financial security as a bargaining tool.

As such, a long-term investor should wait patiently for this to pass, as it is likely to.  My guess is that it will end with a last-minute deal that everyone can spin as a winner.  We shall see.

As with all such times, a reminder that we are goal-focused, plan-driven investors with long time horizons. 

Fear-based decisions can be consequential, and although we intend the consequences to be positive, often they are not.

Successful investors do not react to headlines, but learn to tune out the day-to-day news and focus on the historical success of companies here and around the globe that resiliently adapt to the ever-changing world around them.

It is a lot to ask- but I’m here to help!


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