Why Your Financial Plan Should Ignore Headlines This Fall

That number surprises most people, because coverage of any single shutdown rarely feels like a four day story. This fall you will hear a great deal about two things: whether Congress funds the government before fiscal year 2027 begins on October 1, and what happens on November 3 when voters go to the polls. Both matter to the country. Neither is a good reason to change a well built financial plan. 

Headlines can be very scary. So let’s take a pause, take a deep breath, and look at what the record actually shows. 

What Is Actually On The Calendar 

Federal funding for the current fiscal year runs out on September 30. Congress has been working on a stopgap measure, known as a continuing resolution, that extends current funding levels while the twelve annual appropriations bills get finished. The House passed its version on July 21 to run through December 4. The Senate passed a different version on August 8 to run through December 11. The two chambers still have to agree on a single text before the deadline arrives. 

Notice something about those dates. Both versions would push the next funding deadline past the election and into December. If that holds, the fight drawing the loudest October coverage may turn out to be a December story instead. Headline urgency and actual timelines are not always the same thing. 

What History Says About Shutdowns And Markets 

Shutdowns feel like economic emergencies. Measured against market returns, they have generally been closer to weather. 

Since 1976 there has been no dependable relationship between a funding lapse and stock market performance. Returns during these periods have been slightly positive on average, and the strongest market performance during any shutdown came during the longest one, the 35 day lapse that ran from December 2018 into January 2019. Sector effects have varied from episode to episode and have not repeated in a predictable way. 

The economic effect tends to be a timing shift rather than lasting damage. Looking at the 2025 lapse, the Federal Reserve expected GDP growth to run one percentage point lower in the fourth quarter of 2025 and one percentage point higher in the first quarter of 2026. Activity was delayed, then recovered. That is a very different thing from wealth being destroyed. 

What History Says About Midterm Years 

The pattern here is consistent enough to be worth knowing, and consistent enough to be worth not acting on. 

U.S. Bank reviewed market data across 31 midterm elections from 1900 through 2025. In the 12 months before a midterm, the S&P 500 averaged a 2.9% return, below the 8.9% average for all years in the study. In the 12 months after, the average was 12.4%. 

The temptation is to read that as a trading signal. It is not one. The same research is explicit that the pre election pattern should not be treated as a reason to move in and out of the market, and averages drawn across a century tell you nothing reliable about any single cycle. The more useful takeaway is simpler. Markets tend to dislike unresolved questions more than they dislike any particular answer. Once results are known, attention returns to earnings, interest rates, and growth, which is where it belongs. 

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Where Your Attention Is Better Spent 

Three things this fall genuinely deserve your time, and none of them require predicting anything. 

First, your cash reserve. If your household income touches federal employment, federal contracting, or a business that serves government agencies, a funding lapse is a cash flow event rather than a market event. Confirm you have accessible savings covering several months of expenses. That is the correct response to shutdown risk, and it has very little to do with your portfolio. 

Second, the policy that already passed. The One Big Beautiful Bill Act is law today, and its provisions carry real year end deadlines and real planning opportunities. Legislation already on the books deserves more of your attention than legislation that may or may not be debated next year. 

Third, your rebalancing discipline. Rebalance on a schedule you set in advance, not on a schedule the news cycle sets for you. If your allocation has drifted away from your target, correct it because it drifted, not because of what happened in Washington on a Tuesday. 

The Steady Hand 

None of this means the fall will be calm. Volatility around a funding deadline or an election night is normal, and it may well show up again this year. 

What it means is that a financial plan built around your time horizon, your goals, and your tolerance for risk was already designed to absorb this kind of noise. No drastic moves. Stay invested. And if you are no longer confident the plan fits your circumstances, that is a conversation worth having for reasons that have nothing to do with the headlines. 

At WHZ, we build financial plans around your time horizon, your goals, and your tolerance for risk, so that a news cycle does not have to be part of the calculation. Our Plan Well. Invest Well. Live Well.™ process includes regular reviews and disciplined rebalancing to keep you positioned for the long run through funding fights, election seasons, and everything that follows. Our goal is to provide you with Absolute Confidence. Unwavering Partnership. For Life. Call us at (860) 928-2341 or schedule a complimentary discovery session now with our team. 

Authored by Leisl L. Langevin, CFP® CDFA®. AI may have been used in the research and initial drafting of this piece. The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that an education-funding goal will be met. In order to be federally tax free, earnings must be used to pay for qualified education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10 percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits. 529 plans are subject to enrollment, maintenance, and administration/management fees and expenses. WHZ Strategic Wealth Advisors does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Investments are subject to risk, including the loss of principal. Past performance is no guarantee of future results.  Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084, 860.928.2341. http://www.whzwealth.com. 

RELATED FAQs 

Do government shutdowns cause the stock market to fall?

History shows no dependable relationship. Since 1976, returns during federal funding lapses have been slightly positive on average, and the best market performance during any shutdown came during the longest one. Markets have generally responded more to earnings and economic fundamentals than to funding disputes in Washington. 

Should I move to cash before the November midterm elections?

Historical averages show weaker returns in the 12 months before a midterm and stronger returns in the 12 months after. Even the research reporting that pattern cautions against using it as a signal to move in and out of the market, because averages across many cycles cannot predict any single one. 

Does it matter for my portfolio which party wins?

Historically, far less than most investors expect. What markets have responded to is the resolution of uncertainty rather than any particular outcome. Once results are known, attention typically shifts back to earnings, interest rates, and economic growth. 

I work for a federal agency or a government contractor. What should I do differently?

Focus on liquidity rather than investments. A funding lapse can interrupt income temporarily, which makes an accessible cash reserve covering several months of expenses the practical safeguard. Your long term portfolio is a separate question and generally should not be adjusted for this. 

What is a continuing resolution, and why does it matter to me?

It is a stopgap measure that extends current federal funding levels when the annual appropriations bills are not finished in time. It matters mainly for timing. Both versions under consideration this year would push the next funding deadline into December, after the election. 

What financial moves actually matter this fall?

Year end planning under current law, confirming your emergency reserves are adequate and accessible, and rebalancing on your own predetermined schedule. For most households those three carry far more weight than any election outcome or funding deadline.