The first part of the Fiscal Cliff is now behind us. Since I am more of a stay at home celebration person, my wife became somewhat aggravated with me switching for one channel to another trying to stay informed on the issue. She finally forced me to go to another TV in the house so she could watch Seacrest and the crystal ball bring in the New Year.
So here we are with a plan that does nothing to solve the debt and spending problems but it is a start. The markets across the world are rallying but just like bad news brings markets down, good news forces them up. The key to smart investing is not to let your emotions dictate your investment decision either way. Since I am not a market timer my personal view on this knee jerk rally is to see if there is follow through and then add to positions based on their relative strength.
If you have been reading my comments you know that I am positive on equities but as markets rise so does risk so it becomes much more prudent to first rebalance then add to those areas of the market that will benefit from the decisions made over the last two days.
I hate to end on a discouraging note but I have always been more concerned with entitlements, debt and spending than tax rates and that is what the next Cliff will be formed on. I am working on my observations for 2013 and hopefully have that out for weekend reading.