How can a government shutdown impact my personal finances? - WTOC-TV: Savannah, Beaufort, SC, News, Weather & Sports

How can a government shutdown impact my personal finances?

Posted: Updated:
TYLER, TX (KLTV) -

On Monday evening, President Obama signed legislation to make sure members of the military will continue to get paid during any shutdown, but how could this impact your personal finances like your 401K?

The good news is, experts said potential losses could be temporary based on past experiences.

There have been 17 government shutdowns since the late 1970s, ranging in length from one to 21 days. The last one? 1995.

"Actually, the market increased during that time frame. The average shutdown is about six days and the market, if you just go by averages, has dropped by less than one percent," said Financial Advisor Glen Smith with Edward Jones Investments. 

Smith has some tips for East Texans concerned about the impact this potential shutdown could have on their finances.

"It makes people think they've got to be doing something when realistically, if they have once again, a very well thought out portfolio this is a non-event," Smith said.

He said a lot of talk and rumors can sometimes lead to rash decisions with disastrous results.

"Don't overreact; the way you react to issues can be more detrimental than anything else that happens," Smith said.

The best way to weather the ups and downs of the market?

"I am always going to recommend for clients, or folks, whether it's in a 401K or their personal life, is to have a diversified portfolio with quality investments," Smith said.

Despite this looming government shutdown, Smith said it is important to focus on the positives.

"Our jobless numbers are starting to come down and our jobless claims are at the lowest they've been at in six years. Manufacturing and non-manufacturing indexes are hitting multi-year highs. The real estate market here in general, not only here in Tyler, Smith County, Texas and the United States is getting better and corporations are having record profits," Smith explained.

And if there is a pullback? He said take advantage of it.

"Buy things that are cheap, buy things that will go on sale in terms of investments are concerned. Make sure your portfolio is rebalanced and you are doing what you should be doing for your age or your stage in life," Smith said.

Copyright 2013 KLTV. All rights reserved.

Powered by WorldNow