The estimates vary widely. But it is commonly assumed that if the Fiscal Cliff were unaltered, then we would be in a recession in 2013. And as you probably know, most recessions come with a nasty bear market (average decline of 34%).
So why is the stock market pressing towards new highs when the Fiscal Cliff is looming?
The only viable answer is that investors assume that it will be changed for the better before it takes a bite out of GDP (and our portfolios).
That begs the question: What exactly will happen with the Fiscal Cliff? And when?
Please share your thoughts below.
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Zacks Investment Research
