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Shutdown Impact: Investors Less Confident In Economy But Not Quick To Make Rash Portfolio Changes

Stocks in this article: AMTD

Nearly three-quarters (72%) of investors surveyed say the government shutdown and impending debt-ceiling issue has begun to diminish their confidence in the economy’s recovery, according to a recent poll conducted by TD Ameritrade Holding Corporation (NYSE:AMTD).

While this issue appears to have impacted investors’ economic outlooks, many say that this sentiment won’t affect how they plan to approach their portfolios just yet. Forty-one percent say they haven’t made changes to their investments yet but may pull back if the issue continues. Another 37 percent of investors say they think the shutdown/debt-ceiling issue will pass quickly and therefore they haven’t taken action in their portfolios; 12 percent say they are taking advantage of opportunities as a result of the issue; and 10 percent moved some money to cash temporarily.

And just how will the issue end? One in four investors say it is very likely the government will default on its debt, while another 44 percent say it’s somewhat likely.

“Some investors likely aren’t adding positions or taking on new risk yet until there is a clear picture as to how the shutdown and debt-ceiling deadline will settle,” said JJ Kinahan, chief strategist at TD Ameritrade. “With about one million people furloughed from their government jobs there is concern that this could have an impact on retail sales, housing and durable goods.”

“The shutdown has brought with it renewed economic uncertainty, and many investors may have questions about how to adapt their positions for a variety of potential outcomes,” said Tom Bradley, president of retail distribution for TD Ameritrade. “It’s our objective to provide investors with relevant information and resources to help them answer these questions. We encourage investors to take advantage of the resources available to educate themselves and seek guidance or help, if necessary, before making their next move – whatever that may be.”

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