Beyond the Noise: 2011 Downgrade

Matthew Allgood |


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Fitch, one of the big three rating agencies, downgraded the U.S.’ credit rating – reflecting the likelihood that the United States will be able to pay back its debts. This downgrade has put a spotlight on the U.S.' fiscal outlook, and it's natural to have some concerns. U.S. treasuries have long been considered a safe haven during uncertain times, backed by the full faith and credit of the United States government.


Interestingly, this is not the first time the U.S. has faced a credit downgrade. Back in 2011, another rating agency, Standard and Poor, took similar action. Equities experienced an initial hit, but we can't overlook what happened next – the market recovered just 5 days later. As we navigate this current situation, it's essential to remember that financial headlines can create a lot of noise and stir up emotions for investors. It is also important to remember that rating agencies like Fitch are speculative firms, not unsimilar to how other firms like Morningstar make recommendations based on their market predictions.


While recent news might stir emotions and market reactions, we urge you to stay focused on the bigger picture. Our top priority is guiding our clients through uncertainty, utilizing our RiskFirst® investment approach that cuts through the noise impacting the financial landscape.


Beyond the Noise: 2011 Downgrade

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Source: Bloomberg, Redwood. Data as of 8/4/2023. Date Range from 8/4/2011 – 8/16/2011.




Allgood Financial





Disclosure: This piece is for informational purposes only and contains opinions of Redwood that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Specific securities mentioned are not recommendations to buy or sell. Past performance is not a guarantee of future results. Objectives mentioned are not guaranteed to be achieved. Investors cannot invest directly in any of the indices mentioned above. RiskFirst® is a registered trademark of Redwood Investment Management, LLC.


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