Debt ceiling triggering economic meltdown

[KeepItReal]

Lots of talk today in the news about the debt ceiling and potential impact on investors. If you are an investor, how concerned are you and what precautions are you taking?

 

 

https://www.cnbc.com/2023/01/18/what-the-debt-ceiling-is-and-how-a-standoff-may-affect-consumers.html

 

(Original poster's request: please stay on topic, I would like this thread to remain in the Personal Finance section. No politics pls). 

 

[+ FrankR]

3 hours ago, KeepItReal said:

Lots of talk today in the news about the debt ceiling and potential impact on investors. If you are an investor, how concerned are you and what precautions are you taking?

 

 

https://www.cnbc.com/2023/01/18/what-the-debt-ceiling-is-and-how-a-standoff-may-affect-consumers.html

 

(Original poster's request: please stay on topic, I would like this thread to remain in the Personal Finance section. No politics pls). 

 

As it stands today, the US market appears to be fairly expensive at the moment (measure by looking at PE ratios), in my opinion.  Bond market is also looking expensive, so is the property market and commodities. I am not selling, but have not been putting any money to work in US markets recently. Built up a sizable pile of cash in case of a recession or market turbulance due to debt ceiling shenanigans etc.  
 

Given the current strong dollar and more reasonable PE ratios in emerging markets, i invested my annual IRA contribution in a Vanguard Emerging Markets index fund. Also carries a nice dividend yield. (This is not intended to be, nor should it be considered to be, investing advice or a recommendation. Consult with a financial professional - simply sharing what I am doing)

[+ nycman]

I’m still partying like it’s 1999!

I’m more of a “steady as she goes" type of investor. 
As such, I don’t try to play or game the markets. 
I invest a set amount each year, and then ignore it.
I occasionally rebalance my portfolio (but since 
I’m mostly in index funds there’s really no need), 
and I occasionally sell to offset tax issues that may
arise.

I could care less what the market is doing today, I just
care where it will be 20 years from now. And that’s 
far enough into the future that worrying about it 
or attempting to plan for it, seems delightfully futile.

"Tryin' to run from the destruction
You know I didn't even care"

[BeamerBikes]

Yeah I'm more worried this time around about brinkmanship and grandstanding resulting in an accidental/unintended default.  Still also a likely recession.  I'm in the tech sector and they are pulling back so it'll affect my employers bottom line.  

All that being said.  Fundamentals for most folks.  If you don't have an emergency fund, stop reading and figure out a way to build one before doing anything else.   Don't carry any bad debt - credit cards - big car notes with any non promo interest rates - etc.  Don't go crazy on big purchases.  Rent toys (boat/camper) than own them.   

Rest of the advice is age dependent.  Sock money away in index funds. Watch fees.  Read the fine print. If you can't understand how they make money, don't invest in it.  Sock more money away.  

I still have faith in the US market as least as in the best bad plan we have out there. I'm personally done with trying to pick the winners.  Index funds for the big money and dollar cost averaging.  

[Kevin Slater]

Moderator's note:  I'll be hiding all purely political posts. Feel free to start another thread in the politics forum, but this forum is about investing within the given environment.