Probably over-worrying about DC dysfunctional business as usual but it really feels to me like incompetence is running high enough lately that it’s no longer a negligible risk.
I read Dimon mentioning they’re preparing Chase for such a scenario. What preparations they did are not specified though and certainly they would be different for a bank than for private investors. And obviously not all options are open depending on how your assets are invested.
But what would make some sense to avoid a meltdown due to default while not completely missing out in case it somehow does not happen?
Do you move into commodities like gold maybe, ETFs that short the total bond markets, ultra-short bond funds since these are not as affected by variation in longer term rates, or just go with put options on something like an S&P Index fund if the premium is not already too high so that you minimize losses.