The end of 2018 saw its share of uncertainty from a political and economic standpoint. A key carryover into the New Year was the partial government shutdown, which began on December 22 and extended into a record-breaking, weeks-long affair. The effects of government shutdowns can vary and can become exacerbated as the weeks tick by. One’s inability to confidently operate financially amid these effects can create frustration, but it is always important to consider ways of adjusting to challenging circumstances.
The government shutdown offered a reminder that saving money can help hedge against a “rainy day” and that self-directed investing can put you in the driver’s seat for a key facet of your future. This degree of control can serve you especially well when volatile conditions threaten your near and long-term financial well-being for seemingly indefinite periods of time. The beauty of self-direction lies in your ability to follow a path you know and believe in, and, as recent stock market activity has shown, it can be valuable to have the ability to protect your hard-earned retirement dollars from sudden periods of unease.
Stocks, mutual funds, and other publicly traded securities that more commonly populate retirement plans went for a wild ride as the effects of the government shutdown percolated throughout the economy and added to a nervous narrative at year’s end. The major stock indices plunged through correction territory (a 10% drop from a recent high) before briefly touching bear market territory (a 20% drop from a recent high), with some individual stocks faring even worse. Much of this volatility occurred before the government shutdown, but it likely didn’t help inspire confidence on Wall Street.
Even with the aversion of a new government shutdown and a recovery in stock prices, it’s important to weigh every available factor that could affect your retirement if...and when...concerning financial times return. In seeking to mitigate said effects, alternative IRA investments may be worth thinking about.