One of the secrets to being a successful investor is you must invest when times look bleakest and hold your cash when everyone is euphoric. Emotionally, this is very hard to do. The natural reaction of most people is to run for the exits when the market starts heading down and to buy after a large run-up in prices when everyone in the office is standing around the water cooler lying about how much money they just made in the markets. But you must resist this instinct to be one of the herd, unless you are satisfied with less than average returns.
By nature, I'm a long-term, buy-and-hold passive investor. I don't time the markets and try to get out at the highs and in at the lows. I don't have the skill to do that. But I do, however, try to use my investable cash wisely, which means I may sit on it for a while when I think the markets are frothy and wait for a pullback. Crises, such as the current debt ceiling debate, present one of those opportunities. All the angst and hysteria in the news media over financial Armageddon have caused a sell off. On Friday, I was putting a chunk of my cash to work at what looked to be a bleak moment in this crisis. If the current budget compromise goes down in flames, I'll be back nibbling at equities again.
Always keep in mind that the cheaper the asset price the higher your potential returns. Long-term investors should take great pleasure in these temporary pull-backs and use these golden opportunities to fulfill their goals of investing for retirement, a new house, etc. Emotions are the worst enemy of the investor. If you can discipline yourself to take the opposite action of what your emotions tell you to do, you'll be a much more successful investor.