Bashers want you to believe that the rich will be selling and not investing, but that is just not true. If anything, if there were selling, they would be selling out of top heavy stocks that they have huge gains in, and either buying back in the same stocks, or buying more of stocks that are not up much (SLB) that have huge upside potential and growth. While I do not agree with heavily taxing the rich more, it would not be a huge burden for them if the fiscal cliff does come....more of a burden for (us) middle class if the Bush tax cuts expire! Unreal they can drop a stock early in the day on such relatively low volume.....bet another green rebound later in the day.
I dont think they are selling due to the fiscal cliff, i actually think they think it will be fixed. reason they are selling is the raise in capital gains taxes. the long term rate will no longer be taxed at 15% but will go to at least the short term rate of $28, or their income tax rate, yet to be decided. So they are trying to save that 13% (28 - 15) or more by selling before 2013.
correct, that is the most likely and what I meant....however, do they just sit on the cash, or still invest it? They might as well just buy back in here after selling(no need to wait after a tax gain), or buy anew on SLB. I guess they could buy some stocks with no dividend, but I doubt they all run away and not invest in a company like SLB that has much room to grow. Also, mutual funds will definitely take up the slack...imo.