Markets

Volatility from a possible government shutdown is a good opportunity to invest, Albion strategist says

Key Points
  • Increased volatility from a possible government shutdown is a good opportunity to invest, says chief investment officer at Albion. 
  • During the last three shutdowns, the market went higher, he says. 
  • Others say monitoring earnings after new tax plan will be crucial for market watchers. 
Government shutdown is not a market event: Albion's Jason Ware
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Government shutdown is not a market event: Albion's Jason Ware

As the threat of a government shutdown looms, now might be a lucrative time to invest, said Jason Ware of Albion Financial Group.

"If you have some dry powder, some cash, it might be a good opportunity to put some of that to work around volatility for names that you want to own," Albion's chief investment officer said Friday on CNBC's "Power Lunch."

With current low interest rates, "stock prices still look attractive in this environment," Ware said.

Since President Jimmy Carter was in office there have been 18 government shutdowns. With nonessential government offices closed, Ware said, volatility tends to increase. He pointed out that the last three shutdowns resulted in the market going higher.

But the possibility of a government shutdown might not be the source of the market's movement. Market watchers should pay close attention to this season's earnings to determine how the new GOP tax plan will affect companies, said David Kelly, chief global strategist at J.P. Morgan Funds.

"It's immensely complicated," he said. "All of the equity analysts are working overtime to figure out who the real winners are going to be here. And there are a lot of winners from this, and I think that's what is helping the market move higher."

But as tax cuts help fuel the economy, Kelly cautioned investors.

"Do not get sucked into this uber exuberance here, because there will be another recession," he warned. "There will be a bear market at some stage. And when it occurs, those things that are flying highest today are going to take the biggest hit."

The deadline for a spending deal to prevent a government shutdown is midnight Friday.