Thought of the Week

1. This commentary is not intended as investment advice or an investment recommendation. It is solely the opinion or our investment managers
at the time of writing. Nothing in the commentary should be construed as a solicitation to buy or sell securities. Past performance is no
indication of future performance. Liquid securities, such as those held within DIAS portfolios, can fall in value. Global Financial Private
Capital is an SEC Registered Investment Adviser. All charts courtesy of Yahoo! Finance.
Thought for the Week (274):
Kicking the Can Down The Road
Synopsis
 Crossing the debt ceiling has been averted, and the government shutdown is over… For now.
 Now that our government has “kicked the can down the road” until February, we expect the media will shift its focus back to the possibility of tapering Quantitative Easing (QE) in December.
 Despite the media’s love for the short-term drama, we are far more interested in third quarter earnings and discovering the companies who can continue to grow.
It Comes as No Surprise
Well, all of the concern surrounding the government shutdown appears to be over. Government workers just enjoyed a two-week paid vacation (they will be compensated for their time away from work), and we avoid a default on our debt (despite a near impossibility of doing so anyway).
Take a look at the chart below to see that over the last month, all the fear and panic spurred by our government and the media created a wonderful buying opportunity for long-term investors. Not only did the S&P 500 recover rather quickly, we are now sitting at all-time highs.
There are two key takeaways from the resolution this week and the actions from Congress:
1. The Economy Will Feel Little Impact: We will not know the true implication of the government shutdown until fourth quarter gross domestic product (GDP) numbers, a proxy for economic growth, are released in March 2014. However, history has taught us that shutdowns impact the economy very little, and we expect the effects of our most recent one to be de minimus.
2. The Media Will Shift to Tapering Again: We fully expect that the media’s desires to keep short- term drama front and center will move their focus back to the potential for tapering of Quantitative

2. This commentary is not intended as investment advice or an investment recommendation. It is solely the opinion or our investment managers
at the time of writing. Nothing in the commentary should be construed as a solicitation to buy or sell securities. Past performance is no
indication of future performance. Liquid securities, such as those held within DIAS portfolios, can fall in value. Global Financial Private
Capital is an SEC Registered Investment Adviser. All charts courtesy of Yahoo! Finance.
Easing (QE) in December. Simply put, we expect more short-term disruptions in the market by year-end.
Let’s Focus on What Really Matters
We remain less that impressed over the government’s decision to fund our operations through February. Our leaders have done nothing more than simply “kick the can down the road,” and we fully expect to be back in the same place come late January as our government once again disrupts global equity markets.
As frustrating as these times may be to a registered voter and taxpayer, investors can continue to use these disruptions as buying opportunities. Use the chart above to remind yourself of when short-term disruptions are fueled by catalysts that are not fundamentally sound, investors can profit by using these dips to buy high quality stocks that go on sale.
Rather than put our attention into determining how our government will act or when the Fed will begin tapering, we are more concerned with looking for opportunities in companies that offer real long-term growth potential at a reasonable price.
The bottom line is that the Investment Committee has spent far more time and energy over the past two weeks focused on third quarter earnings and their impact to longer-term growth trends than guessing when members of Congress will resolve their differences. As we move closer to February, our focus and strategy will remain unchanged – look for ways to profit from the fear and panic of others.