There is nothing like the month of October to grab the investment management attention of Minnesota stock market investors.
So far, 2013 has been a dull and boring straight up ride on the popular stock market averages. I think that October is going to require stock market investors to pay more close attention to what they currently own.
October is historically the worst month of the stock market year. This month has had some of the biggest single day stock market declines on record.
On its own, October is enough to scare any experienced stock market investor.
Now add to this October the shenanigans in Washington D.C. over the government shutdown. Each day that goes by this month brings the U.S. government closer to running out of money.
If that were not bad enough, the U.S. Treasury could default on its current debt obligations on October 17th. The debt ceiling needs to be raised prior to that date.
Defaulting on the country’s debt would be catastrophic. That historical event would be even more damaging to the U.S. economy than a government shutdown.
The government shutdown and the debt ceiling are going to make for a nice game of chicken between the Senators, Congress, and the President. There are elections in 2014 for Senators and Congress and no election for the President. Who do you think is going to win this standoff?
My bet is that the Republicans will cave in on the closing of the U.S. government and also on the raising of the debt ceiling.
How the stock market will react to this standoff is anyone’s guess. There is not much history to guide stock market investors now.
Know what stocks you own now, and why you own them. Only take as much stock market risk now as you are comfortable with.
Your year-to-date 2013 stock market investment gains are great. Take the time and do what you need to do in order to not have the last nine months of stock market gains disappear in October.
Ric Lager
Lager & Company, Inc.
