3 Ways Investors Can Navigate the Debt Ceiling Standoff

The U.S. government hit its debt ceiling Jan. 19, which, according to the Treasury Department, could lead to a default as early as June 1 — the so-called X-date.

President Joe Biden and House Speaker Kevin McCarthy, R-Calif., have resumed meeting in hopes of hammering out a deal to avoid a self-inflicted economic catastrophe. Should they fail to come to terms, the default would likely lead to a major selloff of U.S. bonds, unleashing what would be, by expert accounts, a potentially apocalyptic panic that would disrupt economies around the world.

To be sure, history tells us the debt ceiling standoff will not end in catastrophic default. Biden and McCarthy have said they want to avoid that outcome, and the pressure is on for an agreement before June.

But as talks drag on, uncertainty could roil the stock market. A full-on crash is unlikely, but should there be short-term volatility, stock investors can take these steps to prepare their portfolios.

1. Keep a historical perspective


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This article was written by Steven Porrello and originally published on www.nerdwallet.com