Investing in the Debt Crisis

I made a bet back in April that the government was not going to be able to avoid a down grade in the rating of the US debt.  The bet was to move money out of the market onto the sidelines.  I went from 90% of capital in the market to 35% of my money in the stock market.  I left my holdings in Apple and Amazon and few low risk mutual funds.

My bet was slow to start working in my favor, but I just don’t see how the debt crisis gets resolved.  I think the best we do is get temporary relief for a few months before we relive the debate again.  I hate thinking the worst of our politicians but it was obvious early in the spring there was no way we could reach compromise on a grand scale.  Living in Washington my whole life I have never seen the government as divided as it has been over the past 10 years.

Once we get past Tuesday, then it will be time to take stock (pun intended) and decide if and when to get back into the market.  Hopefully our elected leaders sober up and realize what happens when we default.

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