A Good Year
We have just wrapped up what was a very good year in the investment markets despite some considerable stopping and starting. There was plenty of short term volatility driven by political events, elections, international incidents and electronic trading. At the end of the year, we seem to be on fairly solid footing, with the exception of the issue that is on everybody’s lips…….
Although many Americans, especially those still looking for work, are not experiencing a feeling of prosperity, most of our business owner clients are telling me that things are getting better. In fact, a number of them have told me that they have just finished their most profitable year ever. It seems that we may have a “stealth recovery” going on and we face the risk that the twin threats of the world ending on December 21 and the country going over the fiscal cliff on December 31 might derail our recovery.
The Fiscal Cliff
While I recognize the depth of our economic and political challenges, the media firestorm on the “fiscal cliff” reminds me of so many other non-events. I’m going out on a limb and I recognize that there could be a pullback in the markets if congress fails to act or comes out with only a band-aid approach to a major long-term problem. However, events such as Y2K, government shut-downs, and even Obama’s re-election were supposed to result in massive economic and market turmoil. There was a brief interlude where we had some volatility but very little happened.
I view the current troubles in the same light and we are not taking any action (or reaction) to make changes to portfolios based on the media rumblings. If you are concerned, please call us and we can do whatever is needed to alleviate your fears. If we believe some action needs to be taken, we will be in touch….but I do not believe it will have anything to do with the threat from a “fiscal cliff.”