What To Do WRT The Debt Ceiling

Originally posted 2011-07-10 20:19:18

There is a lot of talk all over about the debt ceiling negotiations in Washington DC. Will they come to a deal in time? What will happen if they do make a deal? What will happen if they do not?

I read an article on Seeking Alpha predicting that there will be a deal in time. The author and commenters all think that regardless of what happens there will be a huge sell-off.

I have a friend who used to work on the floor of the NYSE who sold his stocks before the crash in 2008. He put money back in the market in 2009, and sold his stocks recently. He is telling me that I should sell all my stocks.

Dividend investors are more concerned with cash flow than stock price. Many dividend-paying stocks went down severely in price in 2008-2009, but still maintained their dividend payments. I do not have a lot of money. I do not know if I can honestly stomach a large drop in price. I may put a limit order on some of my stocks just to give myself some peace.

A lot of the dividend blogs that I read have had almost no articles talking about how a debt ceiling deal might affect stocks. It could cause a lot of companies to stop paying dividends. The economy could freeze up even more than it did in 2008.

The Dividend Pig has a link to an article to DIY Investor in which the author says he will vote against all incumbents regardless of party if there is no deal. Dividend Monk embeds a CNBC video with an interview with Warren Buffett in which he talks about the debt ceiling. Buffett points out that Republicans raised the debt ceiling several times under George W. Bush. In all seriousness, why do so many Republicans only care about how much money the government spends when we have a Democratic president?

Those two articles were the only two that I saw in the dividend blogs that I look at that talk about the debt ceiling. I find it odd that there is this silence about something that could have a serious effect on the economy.

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Post created on 2011-08-21_11:17:36, last modified on 2018-02-08_23:37:34

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