Investors have to ask themselves two questions. How much can we grow our investments? And, can we afford our mistakes?

Most people are under exposed to global assets, including foreign stocks, bonds and currencies.

The one instrument that has relative political autonomy is monetary policy. Central banks do not need to go to Congress to get approval for an interest rate hike.

Once you start moving [market] lower, then you trigger of all sorts of things. You trigger people who have to sell because they're over-levered. So they sell their winners and their losers. They're just trying to raise cash. So, what you then get is spreading malaise throughout the global markets.

The once-unthinkable loss of the AAA rating will constitute a further hit to already fragile business and consumer confidence.

The world changes! So we're in a situation today where the only policymakers that have flexibility are central banks. But they don't have the instruments! So they've had to experiment, and the more you experiment, the more uncertainty and the higher the risk of collateral damage.

Investors should be cautiously positioned as the global economy and markets face major uncertainties. The downgrade will be a further headwind to growth and job creation in the U.S.