The stock market recently retreated due to worries about the upcoming "fiscal cliff", which refers to tax increases and spending cuts that will automatically take effect at the beginning of 2013 if no deal is reached. The document discusses the potential economic impact of going over the fiscal cliff, as well as strategies investors can take in response to the current uncertainty, such as buying undervalued stocks, using options, or investing in gold. It emphasizes doing fundamental analysis rather than reacting to short-term market sentiment.
2. The stock market retreated recently on
fiscal cliff stock worries, according to the
news.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
3. So, what the Heck is a Fiscal Cliff?
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
4. Fiscal Cliff is a political term.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
5. The fiscal cliff implies a rapid economic
disaster upon letting the Bush era tax
cuts expire,
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
6. allowing mandatory Federal spending
cuts to occur, and seeing an expanding
budget deficit.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
7. The fact is, folks, there is no cliff in fiscal
cliff.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
8. There is the risk of an economic decline
and even a recession if the issues at
hand are not dealt with in a responsible
manner.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
9. However, the worst case scenario is a
slow fiscal slide, which does not have
the political pizzazz of “fiscal cliff.”
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
10. Nevertheless, the market is worried and
oft times market sentiment diverges from
sound fundamental analysis, taking
profits with it.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
11. Before letting fiscal cliff stock worries ruin
our day, let us think about how the
various aspects of the so called fiscal
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
12. cliff might affect intrinsic stock values
and margin of safety, the touch stones of
sound long term investing.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
13. To the extent that the issue is overblown
there may opportunity to pick up good
stocks at low prices.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
14. To the extent that congress and the
president resume the willful Capital Hill
circus of last year it could be
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
15. time to take fiscal cliff stock worries at
face value and get out of the stock
market.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
16. The mighty US dollar suffered a
downgrade last year due to the comedy
on Capitol Hill over raising the debt
ceiling.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
17. The US Federal Reserve has been buying
US Treasuries which has had the
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
18. effect of driving down interest rates and
forcing bond buyers into the corporate
market.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
19. Interest rates on treasuries will likely go up
and prices of treasuries will likely go
down
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
20. if the adults take over on Capitol Hill and
work for the good of the nation and not
their particular political constituencies.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
21. The long term results of coming to grips
with the Federal Deficit with mixture of
tax increases
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
22. and even handed budget cuts, could
spell a long term economic rally the USA
and the world as well.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
23. Long term investors are well advised to
watch to see if the current negotiations
come to fruition of if the nation will
continue to wallow
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
24. in fiscal stimulus generated low interest
rates, devaluation of the US dollar, and
ever more staggering debt for future
generations to deal with.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
25. Success in long term investing comes
from accurately picking the winners and
avoiding the losers.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
26. If the US gets its fiscal house in order
investing in gold will become less
attractive
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
27. To the extent that the fiscal slide occurs
precious metals may get a boost.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
28. During the upcoming period of
uncertainty options contracts may hold
the key for conservative investors.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
29. Puts can act as insurance on stocks that
you believe to be at risk for a fall.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
30. Calls will hold your place in line, at the
current price, for stocks that you believe
might rise.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
31. A practical approach during times of
market uncertainty is to search for
undervalued stocks and profit as their
share prices rise.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries
32. For more insights and useful information
about investments and investing, visit
www.ProfitableInvestingTips.com.
http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries