Ritholtz Not Sweating the Shutdown -- for Now

Though the government shutdown and debt deal drama are monopolizing the financial headlines, Barry Ritholtz of The Big Picture blog says it’s had little impact on his investing approach. And it will stay that way, he says — so long as the stalemate doesn’t last longer than a few weeks. Ritholtz tells Yahoo! Finance’s Daily Ticker about a study that looked at 17 past government shutdowns, and how stocks responded to them. He says that in most cases, the shutdowns were just a blip on the radar in terms of what they did to the market. “Where it becomes a concern … is if weeks turn into months,” he says. “If it goes past three or four weeks, that could take a big chunk off GDP, effect consumer confidence and really have an impact on earnings.” A big negative pull on earnings could mean a potential 20% to 30% decline for stocks, he says. If the standoff does last more than three or four weeks, Ritholtz says he’ll probably start lightening up on his equity holdings and looking at ways to hedge his portfolio. But until then, he appears to be staying the course.

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