(DCNF)—Biden is boasting about the recent stock market rally. He’s right that stocks have been on a tear for the last 14 months. The S&P 500 hit 5,000 for the first time in history. That’s up from 500 some 30 years ago.
Even with all our problems, the United States is the unrivaled alpha male nation. The dollar is the only currency that matters globally (the Euro and BRICS are weak little sisters), and for the first time, the U.S. economy produces far more than all of socialist Europe combined. Our Magnificent Seven Technology firms — Amazon, Apple, Google, Invidia, Meta, Microsoft and Tesla — are close to being worth more than all of the stocks combined in any other country With the exception of China.
But the Biden bull stock market story isn’t all it’s cracked up to be. Most of the gains in the market have only made up for the miserable returns in Biden’s disastrous first two years in office when stocks lost almost 15 percent of their value. In other words, for the most part, the last 14 months have simply made up for the lost ground during the 2022 rout in stocks.
Yes, it’s true that in nominal terms stocks are at record highs. But one of the first rules of investing is that you need to pay attention to your after-inflation profits. If you make an investment in a widget company and in 10 years that stock has doubled in value but the price level in dollars of everything else has doubled, sorry, you’re no better off based on what you can buy with those profits.
Over that period the price level has risen by about 18 percent. The real (inflation-adjusted) rate of return in the S&P 500 after three years of Biden is thus only 8%. This is fairly anemic and well below the average annual real rate of return since the New York Stock Exchange opened its doors, which is a three year average of more than 20%.
Maximize savings. Support great patriot Mike Lindell. Use promo code “JDR” at MyPillow and take advantage of the $25 EXTRAVAGANZA happening right now.
Biden’s performance is also much worse than the bull market under Trump. The S&P was up 36% in real terms at this time of Trump’s presidency, or more than four times better.
Trump has made the case that the rise in the stock market in recent months is a result of the higher likelihood that he will be elected in November. I don’t put too much stock in that claim. If the stock market tanks, is he responsible for that too?
However, an analysis by ace investor Scott Bessent and a member of the Committee to Unleash Prosperity economic council, finds that fluctuations in the stock market over the past year have correlated positively with the betting market odds that Trump will win. Right now he stands at just above 50 percent. This relationship could be spurious and of course by far the biggest factor that drives stock valuations is profits.
One last price of investment advice. Investors should pay attention to the Democratic agenda if they win in November. The Biden economic plan calls for doubling the capital gains tax, taxing unrealized capital gains, and raising both the corporate tax rate and the dividend tax. That is very bad news for sure for stocks. And that, you can take to the bank.
Sound off about this article on the Economic Collapse Substack.
Stephen Moore is a senior fellow with the Heritage Foundation and a co-founder of the Committee to Unleash Prosperity. He is co-author of the book “Trumponomics.”
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
It’s becoming increasingly clear that fiat currencies across the globe, including the U.S. Dollar, are under attack. Paper money is losing its value, translating into insane inflation and less value in our life’s savings.
Genesis Gold Group believes physical precious metals are an amazing option for those seeking to move their wealth or retirement to higher ground. Whether Central Bank Digital Currencies replace current fiat currencies or not, precious metals are poised to retain or even increase in value. This is why central banks and mega-asset managers like BlackRock are moving much of their holdings to precious metals.
As a Christian company, Genesis Gold Group has maintained a perfect 5 out of 5 rating with the Better Business Bureau. Their faith-driven values allow them to help Americans protect their life’s savings without the gimmicks used by most precious metals companies. Reach out to them today to see how they can streamline the rollover or transfer of your current and previous retirement accounts.