Welcome back Obama

Many did not expect Obama’s return to The Whitehouse. It seems that many who didn’t vote for him now fear the changes set to come in Capital Gains Tax hikes. This has triggered a mass sell off in America to realise past profits and minimise tax. The money will return to the markets as this is a one off opportunity to save tax. Once the regime has changed, no investor will knowingly shun a gain, just because they will have to pay tax.

It was satisfying to see that we were able to take advantage of this profit-taking period to re-allign our client portfolios. It meant we sold higher than we re-bought back at. The stories of the Fiscal Cliff worries are as unfounded as they were a couple of years ago but they will drive markets in the short-term.