Stocks ended the day roughly flat, with the Dow (DJINDICES:^DJI) and the broader S&P 500 (SNPINDEX:^GSPC) up just 0.03% and 0.17%, respectively. Note that, despite the fact that Mr. Market finally found his footing after a dismal post-election performance, the VIX Index (VOLATILITYINDICES:^VIX) did not retreat. It appears that investors are finally beginning to price the ambient uncertainty somewhat reasonably. (The VIX, which is based on S&P 500 option prices, is an indicator of the market's expectations for short-term stock price volatility.)

The macro view: In the wake of this week's election, the White House and Capitol Hill indicated that the 'fiscal cliff' is firmly on the agenda -- and none too soon -- as both House Speaker John Boehner and President Obama spoke publicly on the topic today. There's not even a blueprint for an agreement yet, but the fact that there appears to be political will to sit down and find a compromise is encouraging. Nevertheless, investors need to be aware that, given the constraints of the Congressional calendar as the year winds down, averting the fiscal cliff will require a determined effort from politicians, and will likely to go down to the wire. Expect the fiscal cliff to be one of, if not the dominant factor, driving a schizophrenic 'risk-on/ risk-off' market through the end of the year.

Naturally, some stocks are more exposed to this type of political risk than others. I happen to think the fiscal cliff poses an existential tail risk for mREITs that depend heavily on wholesale financing, including Annaly Capital Management (NYSE:NLY). If you're looking for a comprehensive assessment of Annaly's risks -- and its upside -- click here to receive the Fool's premium report on the shares, which includes 12 months worth of updates.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.