This week the government shut down—and yet the Dow and S&P 500 pushed to new highs.  With headlines full of layoffs, rising healthcare costs, and relentless finger-pointing, that outcome felt almost surreal.

Were you surprised?  I was.

Let’s play quick game of Government Shutdown Trivial Pursuit to see how previous shutdowns turned out. (answers are below)

1. How many shutdowns have we had since 1976?
2. Which president presided over the most government closures?
3. Who oversaw the longest one?
4. What was the worst market return during a shutdown?
5. What was the biggest rebound 12 months later?

Looking back at almost 50 years of shutdowns, the story is surprisingly consistent – markets, more often than not, just shrugged:

• During the closures, markets showed positive returns more than half the time.
• One year later, markets had positive gains in 19 out of 22 cases.
• When shutdowns stretched beyond 10 days, the median S&P decline was just 2%.
• Yet in the 12 months following a government shutdown of 10 days or more, the S&P 500 has gained a median of 18.9%.

Markets aren’t easily thrown off course by a government shutdown. The political turbulence may feel enormous in the moment, but it rarely leaves a lasting mark on investors—or your financial future.

Still, not everything about shutdowns is so trivial. For millions of families, they bring real hardships: missed paychecks, delayed services, and the weight of uncertainty. As many federal workers turn to local food banks, you may wish to consider supporting the San Diego Food Bank or Feeding San Diego.

It’s also worth noting that past performance in no guarantee of future results. With the threat of permanent layoffs, this one feels different.  If you have questions or are concerned about your investments, please do not hesitate to call us. We are watching this one closely.

Stay the course,
Barbara


October 5, 2025
 
Government Shutdown Trivial Pursuit Answers:

1. Shutdowns since 1976. (22)
2. President Reagan had the most shutdowns (8).
3. President Clinton oversaw the longest one (21 days).
4. In 1979 the 12-day shutdown experienced a 4.4 decline%.
5. The biggest 12-month rebound was 36.2% in 1982, after a 2-day shutdown.

Check out the links below – they’re very interesting!
 
Sources:

• https://www.cbsnews.com/news/2025-government-shutdown-stock-market/
• https://www.thoughtco.com/government-shutdown-history-3368274.
• https://finance.yahoo.com/news/the-worst-government-shutdowns-and-the-stock-market-what-history-shows-usually-happens-142728907.html.

 
Food Banks:
https://www.sandiegofoodbank.org/
https://feedingsandiego.org/

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