Tomahawk, WI 10/07/2013 (BasicsMedia) – SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has been ion great demand prior to the events of the last one week when the U.S. government experienced a shutdown. This shutdown is not good for business and ETFs such as SPY are felling the full effects. It was only less than a week ago that the market was quite bullish where SPY is concerned. However, anyone with a lot of optimism regarding SPY would be mistaken. There is no denying that the market has suffered a lot since the government offices which need to monitor SPY and ETFs, are not working now.

 When the government is not working, how can investors check on the few details they need to from the government? Normally, when such a market experiences this bullish period, what happens is that investors get quite concerned. When this is now coupled with the shutdown that appears to be far from over, then you get yourself in a very dangerous situation with regard to the ETFs. The market can only benefit from a number of positive factors and if even one appears to have worked against ETFs such as SPY, the gains are quickly lost and uncertainty sets in.

One has to look for ways of protecting investments against the government shutdown which appears to have taken root in the U.S. Investments such as SPY and other ETFs must be protected lest you end up with delays which mess them up. The shutdown isn’t expected to last much longer, but one cannot say with certainty that it won’t. It could go from days to weeks thus causing the financial market to react negatively. If the financial market reacts negatively, you can expect the ETFs such as SPY to be affected as the demand will diminish from the current levels.

 One of the biggest influences on the financial market has to be fear. If the shutdown continues for much longer, then the market is likely to respond accordingly. People will start doing business, or failing to act, based on nothing else other than fear. There are times when fear can produce the right kind of response and actually help an industry or market to push forward. However, there are times when fear will lead top decreased demand and this will not be of much help to industries which are quite volatile such as the one where SPY operates.

 The losses which are expected to occur in ETFs may be short term. But this depends on how long the shutdown continues. The key for the recovery of the financial market depends on how long the shutdown lasts. Somehow, the government has to find a way of resolving the crisis which has thus far led to the shutdown. Investments are suffering, and the demand for ETFs is being affected thus leading to directly to reduction of the gains which SPY had made over the last few weeks. The bullish feeling which had been prevalent has changed to something else.

 At the moment, I hope that this is the week when the shutdown ends so that SPY and other ETFs can continue on their path of gains, and growth.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.