U.S. Fiscal Uncertainty and Your Portfolio

by Charles Rotblut, CFA

The fiscal cliff loomed as we sent this issue to the printer three weeks before the November election. Unless Congress and the president reach an agreement, tax cuts enacted under the George W. Bush administration will expire and automatic budget cuts will go into effect on January 1, 2013. As I said in my Editor’s Note, we are delaying publication of our 2012 tax guide until the January 2013 issue in hopes that we will have more clarity about 2013 tax rates.

Congress is expected to reconvene on November 13. It is possible that both parties will agree on a plan or at least be close to agreeing on a plan by the time you read this. It is also possible that no agreement will have been reached and fiscal uncertainty will still loom. Either way, there are portfolio actions you can and s

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Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/charlesrotblut.


Fred from Pennsylvania posted about 1 year ago:

It is a disgrace that our elected officials put more time and energy into keeping their jobs and getting reelected than it making common sense corrections to our tax codes.

Investors at all levels are insecure about their unknown future.

We have worked and saved all of our lives and now that retirement is close at hand, government inaction will diminish our efforts.

Leroy Siewert from Colorado posted about 1 year ago:


Joseph Turney from Kansas posted about 1 year ago:

I discovered that tax exempt Income is included when Social Security figures your gross income. I would like to know where this authority came from.

Max Higgason from Iowa posted about 1 year ago:

When a political office became a profession We all lost out!

Ashok Choksi from California posted about 1 year ago:

You have not commented on the direction of stock prices, based on your best guess about the outcome of Fiscal Cliff. For instance I have about $25,000/- to invest. Should I wait for the outcome or should I go ahead and invest now? It is not important that your guess should prove correct. Any informed guess is better than drifting.

Ashok Choksi

Charles Rotblut from Illinois posted about 1 year ago:

We do not recommend attorneys or advisers. You may want to check with bar association for the state you live in or are moving to.

Last year, we published an article with questions to ask a financial professional (including lawyers) you are considering hiring. You find it at:


H Mc allister from Arkansas posted about 1 year ago:

I think the only solution to our self indulgent congress is "Term Limits"

Alfred Falcone from New York posted about 1 year ago:

what are your thoughts about inflation, rising interest rates and their role in the deficit?

Alfred Falcone from New York posted about 1 year ago:

what are your thoughts about inflation, rising interest rates and their role in the deficit?

Arthur Gilbert from North Carolina posted about 1 year ago:

The federal budget has increased 7+% per year for 4 years. The sequester would barely dent one year's escalation and provide a ray of hope that would be stimulating to the economy in my opinion. Any simple agreement on taxes would put the issue to bed near term. I would pay more in tax if it was earmarked for debt reduction instead of spending increase.

Ralph Hellender from Florida posted about 1 year ago:


Sime Sunjara from California posted about 1 year ago:

I just signed up. I've been investing/trading for over 10 years and I am yet to find a newsletter to be happy with. What I am looking for is buy/seel recommandation where I will not lose more than 20% on that recommandation, specially when there is already a gain of 20% or more on the same position. As a new subscriber I can not buy whole Portfolio I would like to see some of the best present recommandations to start investing with you. I do not beleave in in long term investing.

Thank you,


Charles Rotblut from Illinois posted about 1 year ago:

Hi Sam,

Trading too frequently can harm your long-term performance. I would suggest reading this article by Mark Hulbert, which looks at the impact transactions have on investment newsletter performance.



Lorene Farmer from Missouri posted about 1 year ago:

I certainly agree on term limits for congress and also having a review of their benefits including their salaries and I think it is ridiculous that they make these decisions for themselves. I would like to see the number of federal employees reduced by 50% and much of what they do returned to the state and local level.

William Crutcher from Texas posted about 1 year ago:

Our elected Washington folks have no skin in the game...

Their "retirement" income is assured
They have a separate health care plan
Most are already wealthy
All they worry about is being re-elected

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