In recent days, some of the public attention surrounding the upcoming fiscal cliff has turned to the U.S. stock markets, which, for all intents and purposes, have remained relatively calm since the election ended and the two major political parties began dueling over the looming tax hikes and spending cuts. Yet, according to some media sources, this grace period could quickly sour if a deal is not reached before the new year.
USA Today, reporting on Monday's market movements, noted that investors were buoyed by a meeting between President Barack Obama and Republican Speaker of the House John Boehner. While no deals were inked during that get-together, it's a positive sign that the two sides are at least trying to find some compromise.
The summit comes after last week's acrimony over twin deals proposed by either side, with the Democrats demanding tax increases on the wealthy and Republicans insisting on significant cuts in domestic policy budgets.
During this time, the market has, for the most part, been forgiving. Yet politicians from both parties seem to be aware that these favorable conditions could change quickly, according to The Associated Press.
"Nobody can predict the markets' reaction," said Rep. Jim Cooper (D-Tenn.) in a recent interview with the source.
California Representative George Miller (D) added that both he and his colleagues should be more sensitive to the fact that the market could shift into negative territory without warning, and that much depends on the two sides coming together with some kind of deal.
"Let's not pretend the markets fully understand the politicians, or the politicians fully understand the markets," he told the AP.
Despite the fact that lawmakers seem increasingly aware of the market' sensitivity to the fiscal cliff, it is important for investors to take the necessary precautions as January 2013 approaches. To learn more about alternative investment methods such as cash flow real estate, visit GreatWealthStrategies.com and download a "Free Game Plan Report" today.