Broker Check

The U.S. Government Shutdown and Your Portfolio

May 03, 2023

Historically, a government shutdown has had a mixed impact on the performance of individual investment portfolios. The specific impact depends on various factors, such as the duration and severity of the shutdown, the industries and companies in which the portfolio is invested, and the overall economic conditions at the time of the shutdown.

In some cases, a government shutdown has led to increased volatility in the markets and a temporary dip in stock prices, particularly for companies with heavy government involvement or funding. For example, during the 2013 government shutdown, the stock market experienced a temporary decline, with the S&P 500 index dropping by 4.4% during the 16-day shutdown period.

However, in other cases, the impact of a government shutdown on individual investment portfolios has been minimal or even positive. For instance, during the 2018-2019 government shutdown, the stock market remained relatively stable, with the S&P 500 index posting gains of 7.9% over the 35-day period.

Overall, while a government shutdown can create uncertainty and temporary market disruptions, its impact on an individual investment portfolio can vary widely and is difficult to predict with certainty.