Whether your candidate won last night or not -- the election
is over and President Obama won four more years.
So now, as investors, it's time to start thinking about what
that means for the stock market.
I was going to ask in this forum, where the best places are to
put your money. This is different than figuring out which stocks
or industries are 'election proof'. The election is over. Now
it's about which stocks or industries should flourish and which
industries might not.
BUT, with the stock market down over 2% at the time of this
writing -- a better question might be, is the stock market the
best place to be right now? And, whether yes or no, why do you
think the market is falling so much?
I believe it has to do with the fear of the impending fiscal
cliff. AND SPECIFICALLY, what a potentially increasing tax
rate might mean for investors.
For example, the long-term capital gains tax is 15% at the
highest level. However, if that low rate is not extended, then
come January, it will increase to approx. 20%, and at the highest
level will conceivably rise to approx. 25%. (I say approx.
because there are other provisions out there that impose
additional taxes on capital gains as a result of the Affordable
Nonetheless, it's possible that tax rates on long-term capital
gains (and short-term gains as well) could go up. AND, the same
goes for taxes on dividends.
I've read that many advisors are advising their wealthiest
clients to lock in those gains at the current rates and not risk
having to pay the higher rates after the first of the year.
We'll see how this all shakes out soon enough.
But why do you believe the market is down so much today?
(And feel free to tell us what industries you think will be
the best going forward.)
To read this article on Zacks.com click here.