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"Cliff" notes on investing

Tuesday, Dec 18, 2012 - 01:53

Dec. 19 - As the two sides appear to be moving closer to a deal on the fiscal cliff, new investment opportunities are emerging. Bobbi Rebell reports.

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The fiscal cliff countdown is getting louder, and both sides are taking steps to get closer to a deal. Wall Street is optimistic: The S&P 500 moving to its highest point in nearly 2 months on Tuesday. For investors, finally getting a deal could mean new opportunities: Plimsoll Mark Capital Chairman Jim Awad: SOUNDBITE: JIM AWAD, CHAIRMAN, PLIMSOLL MARK CAPITAL (ENGLISH) SAYING: "Corporations have been the major player holding back because of uncertainty and so you would have to say that once the uncertainty is cleared, corporations will capital invest, so anybody who serves capital investment, the capital investment side of the economy should get the biggest bang for the buck, as corporations spend some of the money they have built up on their balance sheet." But it's not clear if investors will get a lot of bang for their buck when it comes to the dollar- the dollar index dropped to a two-month low on Tuesday. Marc Chandler of Brown Brothers Harriman: SOUNDBITE: MARC CHANDLER, GLOBAL HEAD OF CURRENCY STRATEGY, BROWN BROTHERS HARRIMAN (ENGLISH) SAYING: "I think this- the prospects of a deal- previously I thought the prospects of a deal would have been good for the dollar- the idea that it would get rid of a major negative hangover - the U.S. But it seems increasingly that investors disagree and instead that they take advantage of new positive news to put on this risk on-trade which in effect in the foreign exchange market means they sell the dollar." Another way to play the cliff: keep an eye on mergers & acquisitions. They stalled for most of 2012- but could pick back up in the new year if there is resolution. Erick Maronak of Victory Capital says investors really can't go wrong- if a deal is reached: SOUNDBITE: ERICK MARONAK, CHIEF INVESTMENT OFFICER, VICTORY CAPITAL MANAGEMENT (ENGLISH) SAYING: "Clarity is always welcome. It's the uncertainty that kills investor enthusiasm sentiment and ultimately stock price performance." Maronak adds that if the U.S. economy avoids another recession and improves- investors should stick close to home- and limit exposure to Europe, China and other higher-risk economies.

"Cliff" notes on investing

Tuesday, Dec 18, 2012 - 01:53

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