December 12th, 2012 (12/12/12) is this century's last sequential date. Some think this date is good luck and the Ancient Mayan calendar describes 12/21/12 as the end of times. The 2009 disaster flick "2012" sparked doomsday rumors with visions of Los Angeles crashing into the sea and the Himalayas being swallowed up by a tsunami. The financial media, not to be outdone by Hollywood, has all eyes on the 12/31/12 fiscal cliff as the end of the US economy as we know it.
Fiscal Cliff - No Grand Bargain - No surprise
The breathless and scary countdown to the fiscal cliff is media hype. It is a desperate effort to drum up drama to keep viewers and readers "tuned in" now that the election is over. Apparently, the financial media does not think the world is coming to an end before we jump off the cliff.
Remember the Y2K scare at the turn of the millennium? Probably not! The fiscal cliff is the Washington Beltway's edition of Y2K. Like Y2K, the fiscal cliff is going to end with a whimper like the similar hyped apocalyptic forecasts.
What if this analysis is wrong and the "first shoe to drop" is Washington jumping off the fiscal cliff? The global stock markets will likely have a "temper tantrum" which is never fun. The "second shoe to drop" will be a forced compromise between the feuding political parties on spending cuts and revenue increases. The stock market will "applaud the result" with a rally. Both political parties will be unhappy with the final agreement and they will remain steadfast in blaming the other guy.
In the meantime, we should be focusing on the financial concerns that we can control:
- How to make my retirement money last as long as I will?
- Where do I improve the yield on my savings?
- How do I pay for rising education and health expenses?
- Do I need life insurance, long-term care insurance, or longevity insurance?
- Are annuities a good or bad thing?
- Should I pay off my mortgage? Should I refi my mortgage?
- What is my claiming strategy for Social Security?
- Can I take better care of my mental, spiritual, and physical health?
For 2013, focus on the narrow overlap of Things That Matter & Things You Can Control in your life.
Everyone at DMM wishes you a Happy Holidays!
