By Liu-Yue (Louie) Lam, Oxstones Investment Club,
The fiscal cliff issue may potentially present a strategic buying opportunity during what is normally a seasonal Santa Claus Rally.
I doubt there will be a grand compromise before year-end. That’s just too optimistic a scenario with so little time left in the year. Expect the same song and dance and more brinkmanship from both parties. Congress will allow the Bush era tax cuts to expire which will also provide Republicans with cover for rates to increase on the rich while negotiating for other rates to be lowered. In general you can expect politicians to continue to kick the can down the road on other issues such as entitlement reform for as long as possible.
But for long term value investors this uncertainly presents a golden gift for the holidays. Make sure to use this uncertainly to do some strategic buying. Realize your wish list before the fiscal cliff issue is eventually resolved. Once it is all clear skies ahead the market will have already taken off.Business and Government, Liu-Yue (Louie) Lam, long term value investors, oxstones investment club, politics and investing, seasonal santa claus rally, stock market commentary, strategic buying opportunity