Two Stocks and a Fiscal Cliff
Here's a quick, blog-like column today so that I can give you big thoughts in small packages. There is a lot going on, so let's quickly hit the fiscal cliff and what I think it means to your portfolio and two fast energy stock ideas.
The election that was said would finally "settle things" looks, at least from the rhetoric I'm seeing, to have settled nothing. So, for anyone looking for a big bipartisan deal on the fiscal cliff after three years of steady failure, stop kidding yourself. Now, I would argue that much of the cliff and sequester does automatically what politicians of both stripes refuse to do -- rolling back all of the Bush tax cuts, cutting defense and Medicare -- and could be worth embracing. But for your portfolio, it's bleaker. A negative move of perhaps 3% in GDP (along with aftereffects of superstorm Sandy) is going to really hurt corporate reports. Furthermore, one of the few "tax entitlements" that will be palatable to everyone in Washington is capital gains. That means FOR SURE that you'll never see this year's 15% capital gains rate any lower and likely drifting higher. Will that lead to an avalanche of both profit and loss harvesting coming? I think that's precisely what's driven much of the recent downdraft....314 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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