So, what about the Fiscal Cliff?

This week, we’ve published excerpts from the latest President’s letter. Yesterday, we discussed one business’s reaction to likely, upcoming tax code reforms and how some are taking advantage of the 2012 rates.

Let’s be clear; we are here to help you maximize your after-tax return. It is not for us to opine on tax policy, per se, but it is our job to assist you in seeking the best deal you can get, within the law, of course.

In our last letter we suggested that the same people in pretty much the same positions just might create a different result this time. And for a few days the market heard signals of flexibility and a commitment to work together to get things done. Then things took a turn for the worse.  We all know it looks bad right now. The two sides are miles apart, and we are hearing more talk every day of just going over the cliff and making political hay out of it, blaming the other guys. Nothing at all promising in the recent proposals. Is it time to worry, even panic?

Speaking of poor Roger (as opposed to poor Richard, who wrote an almanac), we caught some flak for a past letter in which we pointed out that raising the debt limit was not a true crisis, it was all show, just political theatre. And that it would end at midnight, kicking the can down the road, and not making the changes being demanded. Which is exactly what happened.

We are in a similar position now. Except that we are past the presidential election, which might change the calculus. I think it fair to say that any deal will be, as always with these people, a midnight deal. Posturing right to the deadline, then – well, we will see. Our thought is to be concerned; the issues here are certainly important. But discount most of what you hear for now, and wait to see what happens just before Congress adjourns. There is no point in letting all this posturing drive you crazy, we might as well get used to it, and learn to wait for the endgame to see what the result will be. Kind of like basketball, where most games are fairly close and all the decisive action occurs in the last two minutes.

Our point is simple: do not believe what you are hearing and don’t worry about the markets; none of us can guess the outcome or the market’s reaction to it. It might be bad, or really good, or no reaction at all. Or all of the above, in random order.

Even if we go over the Fiscal Cliff, all will not be lost. It will certainly be problematic, but you just never know how all this will work out. Maybe the “endgame” will not happen in mid December, but instead in January, as a response to “the cliff.” And it might work out well despite the drama.

Seriously, have a wonderful Holiday Season everyone! All our best to you and your families.

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Roger Hewins
Roger Hewins

President

Roger Hewins is the President of Hewins Financial Advisors, based in North Palm Beach, FL. Roger has more than 30 years of experience in investment management, helping bring the sophisticated financial advice typically reserved for large institutional clients to everyday investors, from high-net-worth individuals and families to small businesses and retirement plans.

No Comments Yet

Comments are closed

So, what about the Fiscal Cliff?

time to read: 2 min