On August 1, the Fitch Ratings agency downgraded the US debt from its top rating of AAA down a notch to AA+. This is the second time this has happened. Ironically, that was also in August but twelve years again 2011. At that time, the Standard and Poor’s downgraded US treasury debt from AAA to AA+.

So why is this happening now and what does it mean to us as we save for and in retirement?

We want to explore that in this episode and get Don’s perspective on what happened after the last downgrade and try to determine what we can do as investors to protect ourselves moving forward.

Here’s some of what we discuss in this episode:

• Don will provide some background and a big picture view on what’s happening with these ratings.
• Why does this downgrade seem like it’s getting less of a reaction?
• Could we continue to slip even further with more downgrades in the future?
• The stock market’s response over the next decade was still very positive after the last downgrade.
• As an investor, what are the different lessons we can take from last time?
• What does the downgrade of 10 banks mean for me?
• Where do we go from here and what will Don be watching in the future?

If you have any questions about what we discussed in this episode, please reach out and we’d be happy to provide answers.

Resources for this episode: 

https://www.usdebtclock.org/

https://www.investopedia.com/moody-s-downgrades-credit-ratings-for-10-banks-puts-six-others-on-notice-7571278

https://budget.house.gov/resources/staff-working-papers/us-debt-credit-rating-downgraded-only-second-time-in-nations-history

https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart