A guide for the financially bemused, confused, and
slightly concerned about their portfolios
Hello, investor. The federal government has encountered a temporary funding error. Your Social Security: OPERATIONAL. Your Medicare: ACTIVE. Stock market status: SURPRISINGLY CALM. ▊
* No portfolios were harmed in the making of this analysis
| EUR/USD | 1.1762 | +0.20% |
| GBP/USD | 1.3461 | +0.11% |
| USD/JPY | 147.53 | -0.23% |
| AUD/USD | 0.6602 | -0.17% |
Markets are yawning, not panicking. USD down just 0.1-0.2%, Asian stocks mixed, and futures barely budged. Why? Historical data shows shutdowns average 8 days with minimal long-term impact. The real risk? If this drags past 2 weeks, expect $11B weekly economic losses and actual volatility. For now, gold's surge to $3,875 is the biggest move—classic safe-haven play when DC gets messy.
Spoiler: History says your portfolio will be fine. Here's the data.
| SHUTDOWN PERIOD | DAYS | S&P DURING | S&P +12M | KEY ISSUE |
|---|---|---|---|---|
| DEC 21 2018 - JAN 25 2019 | 35 | +10.0% | +26.2% | Border Wall |
| SEP 30 - OCT 17 2013 | 16 | -2.3% | +19.7% | Obamacare |
| DEC 15 1995 - JAN 06 1996 | 21 | +0.1% | +15.2% | Budget Balance |
| NOV 13 - NOV 19 1995 | 5 | -0.2% | +20.2% | Budget Balance |
| OCT 05 - OCT 09 1990 | 3 | -2.9% | +29.1% | Deficit |
| AVERAGE SINCE 1976 | 8 | +0.3% | +16.95% | — |
S&P 500 Returns During Shutdowns (%)
+10% | ████ 2018-19
|
+5% |
|
0% |──────────────────────────────────────────────
| ▓ 1995-96
-5% | ▓ 1990 ▓ 2013 ▓ 1995
|
-10% |
└─────────────────────────────────────────────
'90 '95 '96 '13 '18-19 Time →
The 2025 shutdown's RIF threats add a new wrinkle—permanent cuts could have longer impacts.
Historical data is clear: Government shutdowns are political theater, not portfolio killers. The S&P 500 has averaged +0.3% during shutdowns and +16.95% in the 12 months after. Even the longest shutdown ever (35 days in 2018-19) saw markets gain 10%. Unless this becomes a debt ceiling crisis or drags past 30 days, history suggests staying the course. As Morgan Stanley notes: "Markets hate uncertainty, but they've learned shutdowns are predictably temporary."
Short answer: Your checks will keep coming.
Monthly benefits continue on schedule. Checks for 67+ million beneficiaries are unaffected. Funded through permanent appropriations.
Medical services, Part D prescriptions, and Advantage plans operate normally. Providers get paid. Your coverage is safe.
States have sufficient funding to maintain operations. Medical care continues without interruption.
VA medical facilities remain open. Disability and pension payments continue. GI Bill benefits processed.
Active duty and reserve personnel continue to work and receive pay (though potentially delayed).
Social Security cards, new Medicare enrollments, and benefit verifications face delays. Existing benefits unaffected.
SSA field offices may close. Phone wait times increase. Online services continue but support is limited.
Tax refunds delayed. Audits paused. Customer service mostly unavailable. E-filing still works.
750,000+ federal workers furloughed without pay (receive back pay later). Essential workers work without immediate pay.
Food assistance continues short-term but new applications and recertifications may be delayed.
| Program | Current Benefits | New Applications | Customer Service |
|---|---|---|---|
| Social Security | ✓ Continues | ⚠ Delayed | ⚠ Limited |
| Medicare | ✓ Continues | ⚠ Delayed | ⚠ Limited |
| Medicaid | ✓ Continues | ✓ State-run | ✓ State-run |
| VA Benefits | ✓ Continues | ⚠ Slower | ⚠ Reduced |
| SNAP/Food Aid | ✓ Short-term OK | ⚠ Delayed | ⚠ Limited |
If you're currently receiving Social Security, Medicare, Medicaid, or VA benefits, you can relax. Your October, November, and December payments will arrive on schedule. The government shutdown does not affect mandatory spending programs funded through permanent appropriations. The biggest inconvenience? If you need to call the Social Security office, expect longer wait times. Pro tip from AARP: Handle any urgent business online at SSA.gov or Medicare.gov rather than visiting offices.
Smart money stays calm. Here's what sophisticated investors are actually doing.
History shows knee-jerk reactions cost money. The 2013 shutdown saw a 2.3% dip followed by 19.7% gains within 12 months.
Vulnerable: Tourism, federal contractors, airlines
Resilient: Tech, healthcare, consumer staples
Potential winners: Gold miners, Treasury bonds
Short-term traders might find opportunities in oversold federal contractor stocks. Companies like Lockheed Martin typically rebound quickly post-shutdown.
If you're sitting on cash, don't rush to deploy it. Wait for clarity - historically, better entry points emerge 5-10 days into shutdowns.
12-month post-shutdown average return: +16.95%. Consider this a potential buying opportunity if markets overreact.
Shutdowns remind us that uncertainty is constant. Focus on companies with strong balance sheets, consistent cash flows, and minimal government revenue exposure.
If you have underperformers, shutdown volatility can provide cover for portfolio rebalancing without looking like panic selling.
Real estate, private equity, and commodities remain largely unaffected. Gold's surge to $3,875 shows flight-to-safety still works.
Every portfolio is different. High-net-worth investors often have unique considerations, such as concentrated stock positions, alternative investments, tax implications. A financial advisor or wealth planner can help you navigate shutdown volatility while keeping sight of your long-term goals.
2-minute assessment • Free consultation • No obligation
"The stock market is a device for transferring money from the impatient to the patient." — Warren Buffett
This wisdom especially applies during government shutdowns. Those who sold during the 2018-19 shutdown missed a 26.2% rally over the next year.