By Senior Correspondent Desirée Taylor
The Dow and S&P have taken a dizzying roller coaster ride since the partial government shutdown took effect 11 days ago. On Tuesday, they dropped more than 1 percent. Today they were up more than half a percent.
“They’re fluctuating based on hope and emotions. That’s really the worst situation that can happen for individual investors because it’s an emotional roller coaster,” said Prestige Wealth Management Group CEO Roy Williams.
He says some clients suffer high anxiety, uncertain over the budget stalemate in Washington and the looming debt ceiling deadline.
“We’ve had calls from concerned clients, but again, clients forgot that in 2011 we were downgraded. They relate it as the same situation and it really is different as a lot of cash flows have improved tremendously,” Williams said.
And Williams points out we’re not venturing into uncharted waters. The government shut down twice in the mid 1990s.
“If we look at history, in history when we look at government shutdowns, what happened in the past doesn’t mean it’s gonna happen today,” Williams said. “Normally the markets actually do well during that period of time overall. You’ll have volatility in between. And individual investors have to understand we haven’t had a 10 percent correction in two years. It’s been a while.”
In fact, the Dow posted record gains. And yesterday’s spike erased recent losses. But investors we spoke with seemed a bit uneasy.
“It makes me very apprehensive about the value of my retirement plan. It’s a disgrace that this government is doing this and shutting down,” said Bloomfield resident Jeanette Siccone.
“There are clearly short-term fluctuations. And from my perceptions, the short-term fluctuations are because the politicians do what’s in their own best interests and their own party’s best interests and they don’t seem to focus on the best interests of the people who sent them to Washington to begin with,” said Springfield resident Keith Biebelberg.
“I think the adults are strting to take over in Congress again. It will get resolved because it always gets resolved. And there’s not much you’re gonna do anyway,” Watchung resident Ralph Joel said.
Senate Republicans met with President Obama today. There are compromise proposals on the table leaving investors from Wall Street to Main Street hoping for a quick resolution.