With the failure of the Republicans' health-care bill, the market is wondering if the GOP can get tax reform done — but there could be a "win" still to come for politicians and Wall Street, expert Michael Farr told CNBC on Tuesday.
"There is a win-win here for portions of this tax reform deal for Republicans and Democrats agreeing both on the corporate tax and the repatriation," the president of Farr, Miller & Washington said in an interview with "Power Lunch."
"If they can get that done and we can see some progress, then I think markets stabilize and go higher. If not, then I think a tantrum is in the offing."
The Republican health-care plan collapsed on Monday night after leaders failed to get enough votes for passage. On Tuesday, Senate Majority Leader Mitch McConnell said he wanted a vote on a straight repeal of Obamacare without a replacement in the "near future," but three members of the caucus have already said they would not support such a bill.
Farr said while it is too early to suggest a market reversal right now, investors should check their asset allocations.
"Because the equites are at all-time highs, then if you are above your allocation, yes, this is a very good time to come back and rebalance and make sure that you are not over-allocated to equities," he said.
"Caution is really important when the market is making new highs because when this music stops you want to make sure your clients have a seat."
WATCH: Mitch McConnell: We'll have a vote to repeal Obamacare in the near future
