Fiscal policy: The debate on resolving the fiscal cliff is now the main focus. The election does not appear to have changed party control of the White House, the Senate or the House of Representatives. In the near term, there is uncertainty over how this will be resolved, but investors should note this is unlikely to extend deep into H1 2013.

Debt ratings: Rating agencies are likely to renew their focus on any plan to address high levels of government debt. While most agencies have indicated they are likely to wait well into 2013 before reviewing their US sovereign credit rating, the pace of progress will be crucial. The debt ceiling debate in early 2013 is the likely first hurdle.

Monetary policy: Uncertainty around the renewal of Bernanke's Fed Chairmanship under a Romney Presidency is now a non-issue.

Market outlook: Elevated fiscal policy uncertainty means a temporary market pullback is likely, but we continue to see this as a buying opportunity. Equities remain our most preferred asset class on a 12-month basis.

Eoin Treacy's view President Obama has been re-elected, the Republicans held the House of Representatives while the Democrats held the Senate. Therefore the status quo has been maintained. President Obama promised to reach across the divide in US politics during his victory speech and John Boehner says that he would accept some tax hikes under certain circumstances. However, one wonders just what those conditions are likely to be and the negotiation process is likely to be difficult and drawn out. One can hope that a simplification of the tax system will be included but that might be a pipe dream.

At The Chart Seminar in San Francisco last April, the rate of tax on dividends was a major area of concern for a number of delegates. They highlighted the impact higher dividend and capital gains taxes would have on the portfolios of their clients and that this would necessitate a change in how they manage their investments. A debate ensued on whether tax should be a factor in when to sell. This question is likely to come into sharper contrast as the spectre of higher taxes looms. This article from Bloomberg covers the financial implications of the proposed changes. Here is a section:

The rate on dividends for high-income taxpayers will rise to 43.4 percent from 15 percent and the top rate on capital gains to 23.8 percent from 15 percent. For an individual with $10,000 invested in the S&P 500, payouts would fall to $120 a year from $180.20 should the old rate be reinstated. An investor who sells the stock at a $5,000 profit would face capital gains obligations of about $1,190 compared with $750 now.

Investors feel compelled to weigh the value of holding an investment for a while longer on the chance it will move higher but eventually be liable for higher taxes, rather than realising the profit now and holding more of the gain. If stocks continue to decline more people will inevitably join the latter camp until deeper value is perceived. The response to the election result so far has been emotional above all else and it could be another few days before markets settle. The risk of being whipsawed has obviously increased. One of the main questions for the lame duck session will be how likely the proposed tax increases are likely to be implemented.

The fact that so many people have significant paper profits locked up in Apple's shares may have been a consideration in the recent sell off as they compute the CGT implications of selling now versus potentially in January.