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Fiscal Cliff Stock Worries By www.ProfitableInvestingTips.com

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http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries Fiscal Cliff Stock Worries The stock market retreated recently on fiscal cliff stock worries, according to the news. So, what the Heck is a Fiscal Cliff? Fiscal Cliff is a political term. The fiscal cliff implies a rapid economic disaster upon letting the Bush era tax cuts expire, allowing mandatory Federal spending cuts to occur, and seeing an expanding budget deficit. The fact is, folks, there is no cliff in fiscal cliff. 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. However, the worst case scenario is a slow fiscal slide, which does not have the political pizzazz of “fiscal cliff.” Nevertheless, the market is worried and oft times market sentiment diverges from sound fundamental analysis, taking profits with it. Before letting fiscal cliff stock worries ruin our day, let us think about how the various aspects of the so called fiscal cliff might affect intrinsic stock values and margin of safety, the touch stones of sound long term investing. To the extent that the issue is overblown there may opportunity to pick up good stocks at low prices. To the extent that congress and the president resume the willful Capital Hill circus of last year it could be time to take fiscal cliff stock worries at face value and get out of the stock market. Hopes of Fixing the Fiscal Mess The mighty US dollar suffered a downgrade last year due to the comedy on Capitol Hill over raising the debt ceiling. The US Federal Reserve has been buying US Treasuries which has had the effect of driving down interest rates and forcing bond buyers into the corporate market. Interest rates on treasuries will likely go up and prices of treasuries will likely go down if the adults take over on Capitol Hill and work for the good of the nation and not their particular political constituencies. The long term results of coming to grips with the Federal Deficit with mixture of tax increases and even handed budget cuts, could spell a long term economic rally the USA and the world as well. 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 in fiscal stimulus generated low interest rates, devaluation of the US dollar, and ever more staggering debt for future generations to deal with. Practical Approaches Success in long term investing comes from accurately picking the winners and avoiding the losers. If the US gets its fiscal house in order investing in gold will become less attractive. To the extent that the fiscal slide occurs precious metals may get a boost. During the upcoming period of uncertainty options contracts may hold the key for conservative investors. Puts can act as insurance on stocks that you believe to be at risk for a fall.

TRANSCRIPT

Page 1: Fiscal Cliff Stock Worries

Fiscal Cliff Stock WorriesBy www.ProfitableInvestingTips.com

Page 2: Fiscal Cliff Stock Worries

The stock market retreated recently on fiscal cliff stock worries, according to the news.

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 3: Fiscal Cliff Stock Worries

So, what the Heck is a Fiscal Cliff?

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 4: Fiscal Cliff Stock Worries

Fiscal Cliff is a political term.

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 5: Fiscal Cliff Stock Worries

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

Page 6: Fiscal Cliff Stock Worries

allowing mandatory Federal spending cuts to occur, and seeing an expanding budget deficit.

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 7: Fiscal Cliff Stock Worries

The fact is, folks, there is no cliff in fiscal cliff.

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 8: Fiscal Cliff Stock Worries

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

Page 9: Fiscal Cliff Stock Worries

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

Page 10: Fiscal Cliff Stock Worries

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

Page 11: Fiscal Cliff Stock Worries

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

Page 12: Fiscal Cliff Stock Worries

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

Page 13: Fiscal Cliff Stock Worries

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

Page 14: Fiscal Cliff Stock Worries

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

Page 15: Fiscal Cliff Stock Worries

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

Page 16: Fiscal Cliff Stock Worries

Hopes of Fixing the Fiscal Mess

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

Page 17: Fiscal Cliff Stock Worries

The US Federal Reserve has been buying US Treasuries which has had the

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 18: Fiscal Cliff Stock Worries

effect of driving down interest rates and forcing bond buyers into the corporate market.

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 19: Fiscal Cliff Stock Worries

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

Page 20: Fiscal Cliff Stock Worries

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

Page 21: Fiscal Cliff Stock Worries

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

Page 22: Fiscal Cliff Stock Worries

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

Page 23: Fiscal Cliff Stock Worries

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

Page 24: Fiscal Cliff Stock Worries

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

Page 25: Fiscal Cliff Stock Worries

Practical Approaches

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

Page 26: Fiscal Cliff Stock Worries

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

Page 27: Fiscal Cliff Stock Worries

To the extent that the fiscal slide occurs precious metals may get a boost.

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries

Page 28: Fiscal Cliff Stock Worries

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

Page 29: Fiscal Cliff Stock Worries

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

Page 30: Fiscal Cliff Stock Worries

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

Page 31: Fiscal Cliff Stock Worries

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

Page 32: Fiscal Cliff Stock Worries

For more insights and useful information about investments and investing, visit www.ProfitableInvestingTips.com.

http://www.profitableinvestingtips.com/investing-trading/fiscal-cliff-stock-worries