What are your plans for New Year’s Eve this year?
While some people like to spend the night out on the town, others prefer a small gathering with friends or family or maybe even a family movie night at home. Some people enjoy celebrating the bright spots of the previous year while others optimistically look forward to the fresh start that a new year brings.
However you intend to ring in the federal government’s new fiscal year on Sunday, October 1, I would recommend avoiding any plans that hinge on the availability of “nonessential” federal government employees.
As you likely know all too well, Congress is not currently on track to fulfill its statutory obligations of finalizing a federal budget by September 30. When the clock strikes midnight and September 30, 2023, flips to October 1, 2023, the federal government will start a new fiscal year whether Congress is ready or not.
Surprises could certainly happen in the next few days, but by all appearances most federal agencies will likely be temporarily closed until Congress authorizes funding for the new year – whether it is a temporary extension of last year or full-year spending authorization.
How will this pending brouhaha impact your long-term financial plan? It likely won’t unless you let it.
Politics is a hot mess that should be quarantined from your financial plan. If you choose to abandon the “cold” long-term logic of your financial plan and replace it with a hot short-term mess, the results are unlikely to be favorable to you in the long-term. Resist the temptation.
Unfortunately, it will become easier and easier to get caught up in the worry and drama the political parties pander during the onslaught of hyperbolic headlines likely heading our way over the next few weeks. Their politicians’ hero complex motivates them to agitate false fears so they can heroically rescue you from the imminent doom they create.
It is impossible to predict how traders will respond to this political gamesmanship. They could temporarily lose confidence and decide to sell (which was the theme for last week). They may shrug it off knowing its impact on the overall economy will likely be minimal. They are unlikely to cheer political incompetence.
And all of this consternation is for an event with a known outcome – Congress will agree to fund the government. The only unknown is how many extensions they will need to get it done. My best guess is that everything is finalized in a 2,000+ page omnibus bill before Christmas . . . just in time to celebrate New Year’s Eve.
While traders may not be confident in the short-term, you can be confident in your long-term financial plan during chaotic times. Our consistent process for developing, implementing, and ongoing monitoring of your financial plan does not change with the financial markets or Congressional malfeasance.
If you know of someone you care about who could use a consistent confidence boost, we are here to help. Please share us!
Quote of the week: Groucho Marx: “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.”