The government shutdown is no real threat to markets – Peattie and Sizemore

How should investors respond to the U.S. government shutdown? Covestor portfolio managers Bill Peattie and Charles Sizemore weighed to’s Ellen Chang:

The current government shutdown should not be viewed as a threat to the financial markets, said Bill Peattie, founder of Peattie Capital Management and a portfolio manager on Covestor, a registered investment advisory.

The market will perform well over the long term as the economy rebounds, he said. “Longer term, even with the onset of tapering sometime in the next three to 12 months, there is still enormous liquidity in the system and reasonable valuations in a number of parts of the market,” he said. “On balance, global economies are improving, albeit slowly and sporadically.”

Sizemore concurs with Peattie:

Even if the market tanks over the short term, equities will likely rebound like they did in the 1990s, said Charles Sizemore, a portfolio manager on Covestor, who advised investors to avoid panicking. “My point is simply that the debt ceiling crisis doesn’t matter,” he said.

More on the impact of the fiscal crisis on markets: Will the government shutdown put U.S. stocks on furlough?