In light of the devastating earthquake and tsunami in Japan almost two weeks ago, I thought some perspective on how investors should react to natural disasters might be appropriate. Obviously, the financial markets will have already reacted by the time you are reading this, but the lessons from the earthquake and tsunami in Japan are at least a bit similar to the lesson of Hurricane Katrina and other past natural disasters and may be beneficial to consider for future events.

Obviously, our thoughts are with the Japanese people as they struggle through this difficult time, but as an investor, it is important to separate the human disaster from the economic impact and the resulting impact on asset values in your portfolio.

I would expect there to be no lasting negative economic effects from the Japanese quake when viewing the world economy. There may be a temporary negative impact to the local Japanese economy as the people there assess their future and start the healing process. It is also quite possible there could be some positive effects from the recovery and rebuilding effort, as money which is currently held in savings and insurance company reserve funds is spent to put things back the way they were. There is some precedent for this when we look back to the year following Hurricane Katrina, where the rebuilding effort in Louisiana and Mississippi is estimated to have added about 0.5 percent to the overall U.S. economic growth rate.

The nuclear power plant situation is very serious from an environmental and human safety standpoint, but there again, there is some precedent when we look back to the Three Mile Island and Chernobyl nuclear incidents, where financial systems and economies continued to grow as those situations were dealt with.

So from the investment standpoint, we should concern ourselves with whether or not an event will cause the economy to expand or contract, whether job growth will be impacted, and what the impact on interest rates might be. For the U.S. investor, I don't believe any reaction to the earthquake is warranted in your investment portfolio, unless some related chain of events ended up resulting in a dramatic rise in interest rates or an inflationary spike.

The initial reaction of the world's financial markets in the first day or so after the event has not revealed panic or any message I believe warrants a change in overall portfolio philosophy. If I had to make a guess on a micro level, I would say there may now be some pressure to cancel some nuclear power plant projects that may be on the drawing board, and companies which are involved in that industry may see their stock prices suffer. However, that is a very small segment of the overall market and would not overreact to this situation.

Tom Breiter is president of Breiter Capital Management, Inc., an Anna Maria based investment advisor. He can be reached at 778-1900. Some of the investment concepts highlighted in this column may carry the risk of loss of principal, and investors should determine appropriateness for their personal situation before investing. Visit www.breitercapital.com.