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"Debt ceiling ‘X-Date’ is coming. What should an investor do?" an interview with Tom Samuelson in Insurance Newsnet

May 25, 2023 2:19:18 PM

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"Debt ceiling ‘X-Date’ is coming. What should an investor do?" – Interview with Vineyard Global Advisors Chief Investment Officer Tom Samuelson, CFA, CMT 

Tom Samuelson shared his insights on Insurance Newsnet with Doug Bailey about the debt ceiling showdown and what it means for investors.

In this interview, Doug, Tom, and others explore the current looming debt crisis, what investors might expect, why diversification is essential, and which strategies can help investors take advantage of potential market declines. Although most anticipate Congress will raise the debt ceiling, as has happened 78 times since 1960, investors should be prepared if a default scenario plays out. 

This article explores...

Why Cash is "Dry Powder," and Market Declines can Represent a Buying Opportunity.

During the last debt ceiling showdown in 2011, the S&P 500 dropped 19% over the following six months. There's no question that x-dates can stoke the fires of volatility. However, that same drop represented a buying opportunity that boosted the S&P 500 to 33% over the next 12 months. Reserving cash and holding hedged positions that produce profits can be used to take advantage of market declines to purchase stocks with long-term potential.

Diversification and Hedging will Help Investors Navigate Potentially Volatile Backdrops. 

Spreading investments across asset classes and holding hedged positions can help buffer against downside volatility and provide profits to re-invest in stocks. No matter how the debt ceiling showdown affects markets, reactionary sell-offs will result in losses and taxes, so investors should take the long view and consider that markets will ultimately course correct over the long term. In addition, proper hedging can help investors to have less of a hole to dig out of as markets improve. 

Read the Full Article Here...

Host: Doug Bailey, Insurance Newsnet.

Guest: Tom Samuelson, CIO of Vineyard Global Advisors

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