Todd Hauer //October 18, 2012//
At the end of the year, the President and Congress are expected to decide on an issue that may drastically affect future investing. President Obama and Congress are going to have to deal with the “Fiscal Cliff” during Congress’s lame duck session.
The “Fiscal Cliff” refers to the possible financial chaos the United States will face if certain tax increases and spending reductions are allowed to automatically expire or go into effect at the beginning of 2013.
According to Morgan Stanley’s Investor Insights (October, 2012), “If the Bush tax cuts expire at the end of 2012 as scheduled, most taxpayers will face some combination of higher tax rates on their incomes, dividends and capital gains in 2013. In addition, high earners also will pay an additional 3.8 percent tax on their investment income and a 0.9 percent higher Medicare tax as legislated by the Patient Protection and Affordable Care Act (better known as ‘ObamaCare’).”
With political pressures affecting the economy, investors should be watching carefully and be even more vigilant in reviewing and adjusting their asset allocation and overall portfolio strategy.
Here are 10 strategies to help navigate the uncertain landscape as outlined in the Morgan Stanley Investor Insights report: