When the Press warns of all the bad that MIGHT happen...

My advice is to avoid any anxiety related to the political comedy in Washington DC.  Short term market reactions to the recent “2011 Debt Downgrade” crisis and “2012-2013 Fiscal Cliff and Sequestration” crisis have proven to be overdone—essentially buying opportunities WHEN looking back from a long term perspective. It is impossible to predict the market reaction to the present shutdown and debt ceiling controversy, but the end result is probably that we simply return to the market realities of a long term slow but steady growing economy where inflation begins to become more of a problem.

My greatest fear STILL continues to be real inflation over the longer term and a diversified portfolio of good quality assets is one of the best strategies to address that risk.

 

Just look at the rising cost of groceries, medicine, health insurance, college tuition; and government reports of low 2% inflation seem laughable. I think fixed income markets are still underestimating inflation risks and bonds continue to look potentially dangerous—an environment that is very different than what we have been used to for twenty plus years.