Well, the unknown is now known and whether or not you agree with the outcome, we have to adapt. The problem is that nothing has changed from the way it was yesterday. Fiscal cliff will now be the subject of the talking heads, and we can expect all kinds of second guessing as to how it will play out. Health care will also move to the forefront, but adjusting to socialized medicine will have to be accepted. Risk reduction is now very important in portfolios until we see if our current President takes my advice from yesterday’s blog and becomes statesmanlike and leads thinking of the American people first instead of his personal bias and agenda. The President has a real opportunity to leave a legacy if over the next four years he realizes he does not have to worry about getting reelected and makes wise judgments to solve the problems that he didn’t in his first four years.
History is on his side if you look at what the economy did in Clinton’s second term–it can be done. The President now owns the economy; he can no longer use the blame game to deflect the criticism he has experienced over the last four years. The unknown here is: does he have the skills and ego to accomplish it? He has nothing to prove now that he has won, so my prayer is he doesn’t disappoint us by pursuing what he wished for.
I have been working for the last week on adjustments to portfolios based on last night’s results, and as this plays out, I will keep you informed and take action to ride this out. The sell off this morning I expected; however, I am not overreacting to what may be a knee-jerk reaction. It is important to stick to our discipline and manage risk, which is what we do every day.