Fiscal Cliff Fight Investment Losses

Despite the very public agreement to
extend middle class tax cuts and
increase taxes on the very rich, the
fiscal cliff fight continues.

http://www.profitableinvestingtips.com/investing-trading/fiscal-
cliff-fight-investment-losses

Our concern in this investment
column is fiscal cliff fight investment
losses.


One bright spot for those who believe
in the right for parents to pass their
wealth on to their heirs


heirs is that the $5 million inheritance
tax exemption, plus COLA
adjustments, passed along with the
other tax bills.


However, the issue of economic
uncertainty continues


and here is where we believe fiscal
cliff fight investment losses are likely
to occur.


Supporters of low taxes commonly
say that high taxes drives investment
offshore.


That may be true but our belief is that
uncertainty is a greater deterrent to
long term investment.


Thus we believe that fiscal cliff fight
investment losses will be related to
the fact


that many with money are not
sufficiently sure of the future to
engage in long term investing.


Fundamental analysis becomes a
joke


when congress repeatedly threatens
not to pay the bills that it has caused
the country to accumulate.


A joke going the rounds is that the
US Treasury should mint a $1 Trillion
platinum coin


and use it to pay for a large chunk of
US debt.


What is a little frightening is that no
one seems to understand


that we are already printing money to
keep the economy going.


Where Will Fiscal
Cliff Investment
Losses Occur?

The stock market will likely suffer if
Congress and the White House
cannot come to an agreement


limiting US spending and agreeing to
pay necessary debts.


Last time around the perfect US
government credit rating took a hit.


To the extent that those in charge
cannot get a handle on spending,


the dollar will continue to fall over
time and everyone with money in the
bank or a paycheck


will see the value of their holdings
and earnings decrease with inflation.


The dollar may not fall versus the
Euro but it may suffer


when traded against the currencies
of the BRICS nations or even


countries like Colombia whose
currency did the best of all against
the dollar in 2012.


When Americans start investing in
foreign stocks


or engage in foreign real estate
investments


as a result of the politicking in
Washington,


it means fiscal cliff fight investment
losses at home.


Can We All Just
Learn to Agree?

The United States is badly in need of
consensus.


Better put, the nation is badly in need
of leaders


who govern by consensus.


This gets back to our assertion that
fiscal cliff fight investment losses


will come from uncertainty instead of
from a specific set of policies that
may be enacted.


The nation has come through a large
number of economic and political
scrapes, global wars and a civil war.


It all works out over time if
individuals, families, and investors


have a sense of a fair playing field
and a sense


that what the rules are today will be
the rules tomorrow.


In the meantime, look at consumer
stocks as an anchor during tough
times,


dividend stocks like power
companies for steady return,


and do not let fiscal cliff stock worries
give you and ulcer


as it may just work out in the end


And, always do your own
fundamental analysis.


Fiscal Cliff Fight Investment Losses

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Fiscal Cliff Fight Investment Losses