{"id":3484,"date":"2023-09-30T12:57:09","date_gmt":"2023-09-30T18:57:09","guid":{"rendered":"https:\/\/madisonpoole.com\/?p=3484"},"modified":"2023-10-26T14:04:23","modified_gmt":"2023-10-26T20:04:23","slug":"government-shutdown","status":"publish","type":"post","link":"https:\/\/madisonpoole.com\/government-shutdown\/","title":{"rendered":"Government Shutdown Drama – “On the Mark” from AssetMark"},"content":{"rendered":"

Hello Friends, here is the latest on the government shutdown, from AssetMark ~ The Madison Poole Crew<\/em><\/strong><\/p>\n

Key takeaways<\/h5>\n

\u2022\u00a0The latest government shutdown will add to the wall of worry but does not equate to another government default potential.<\/p>\n

\u2022\u00a0Government shutdowns are sadly not uncommon. Since 1976, there have been 20 shutdowns of varied length with an average time of 8 days.<\/p>\n

\u2022\u00a0Government shutdowns are high drama but have historically had limited impact on the economy and markets, and thus does not warrant portfolio changes on its own.<\/p>\n

Here we go again<\/h5>\n

Once again, the dysfunction in Congress could lead to a government shutdown if a deal is not reached by September 30, 2023. For many, this may be confusing, as we just went through another debacle earlier this year. <\/p>\n

While this shutdown could be disruptive to many public sector functions, it doesn\u2019t rise to the level of a possible debt default by the United States, as last seen in June 2023. Regardless, the ongoing dysfunction will add to the uncertainty and confusion. In this special edition, we take a look at the historical impact of government shutdowns on
\nthe economy and stocks.<\/p>\n

Don\u2019t get sucked into the drama<\/h5>\n

Government shutdowns are sadly not new, but the good news is that history tells us about the impact on the economy and markets is limited. Since 1976, there have been 20 government shutdowns with varied length. The longest one lasted 35 days in 2019, and the shortest one was for one day in 1982. The average length of the shutdown was eight days. Goldman Sachs estimates that each week of government shutdown reduces GDP growth by 0.15 to 0.2% percentage points.1<\/sup> depending on the depth and length of the shutdown. However, much of the losses are recouped because federal employees receive retroactive salaries after the shutdown ends, and any impact on economic loss is recovered and thus limited.<\/p>\n

For the markets similarly, we have seen limited impact. Looking at the S&P 500 across the 20 shutdowns in the chart below, stocks have been up 50% of the time during the actual shutdown period and have been flat on average over all periods.2<\/sup><\/p>\n

For clients, it is important to maintain the perspective that government shutdowns are high drama but have a limited impact on the economy and the markets.<\/p>\n\"\"<\/panel>\n

1. https:\/\/www.goldmansachs.com\/intelligence\/pages\/the-cost-of-a-us-government-shutdown.html<\/a>
\n2. https:\/\/www.truist.com\/wealth\/insights\/market-perspective\/government-shutdowns-inject-volatility<\/a><\/p>\n

<\/div>\n

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AssetMark is not an affiliate of OneAmerica Securities and is not a OneAmerica company.<\/p>\n

Important Information
\nThis is for informational purposes only, is not a solicitation, and should not be considered investment, legal or tax advice. The information in this report has been drawn from sources believed to be reliable, but its accuracy is not guaranteed, and is subject to change. Investors seeking more information should contact their financial advisor. Financial advisors may seek more information by contacting AssetMark at 800-664-5345.
\nInvesting involves risk, including the possible loss of principal. Past performance does not guarantee future results. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss. Actual client results will vary based on investment selection, timing, market conditions, and tax situation. It is not possible to invest directly in an index. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Index performance assumes the reinvestment of dividends.
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\n\u00a92023 AssetMark, Inc. All rights reserved. 105189 | C23-19534 | 1\/2023 | EXP 1\/31\/2025<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

The latest government shutdown will add to the wall of worry but does not equate to another government default potential.<\/p>\n","protected":false},"author":3,"featured_media":3486,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/posts\/3484"}],"collection":[{"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/comments?post=3484"}],"version-history":[{"count":9,"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/posts\/3484\/revisions"}],"predecessor-version":[{"id":3536,"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/posts\/3484\/revisions\/3536"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/media\/3486"}],"wp:attachment":[{"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/media?parent=3484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/categories?post=3484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/madisonpoole.com\/wp-json\/wp\/v2\/tags?post=3484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}