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Arguing Trump, Biden & your 401(k) with Uncle Alfred: A Thanksgiving Tale

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By Brett Arends

The scene: Your Thanksgiving table. The entire family is sitting around it, six feet apart, trying to eat turkey, gravy and stuffing, drink beer, and talk — all while wearing masks.

Suddenly Uncle Alfred speaks up.

Uncle Alfred: You mark my words! The economy’s going to go to hell in a handcart when Trump leaves office next year. The stock market’s going to collapse. You’d better sell everything in your 401(k) before it becomes a 201(k)!

Aunt Jemmy: Alfred! Put your mask back on!

Uncle Alfred: (Mumbles, and puts mask back on)

You: Uncle Alfred — why do you think the stock market’s going to collapse under Biden?

Uncle Alfred: The Democrats are bad for business. More taxes. More regulations. More deficits. Everybody knows that. They’re all socialists.

You: Well, over the past hundred years the stock market’s actually done better under Democratic presidents than Republican presidents. 

Uncle Alfred: That’s not true. We’ve had a fantastic stock market under Trump.

You: Yes we have. But it’s also been good under a lot of Democrats. Adjusting for inflation, it’s up 0.9% a month on average under Trump. But it was up 1% a month under Obama, and 1.2% a month under Clinton.

Uncle Alfred: That must be fake news!

You: Well, the numbers are based on Robert Shiller’s data. He’s a finance professor at Yale. He won the Nobel Prize for economics. Take it up with him.

Uncle Alfred: (Mumbles and takes a forkful of mashed potatoes.)

You: In the past 100 years the stock market did worst under Hoover, Nixon and George W. Bush. All three were Republicans. They’re the only presidents where the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.21% lost value against inflation.

Uncle Alfred: So what? You’re trying to tell me Republicans are bad for the stock market?

You: No. There aren’t enough data points to draw any simple conclusions. Presidents don’t control the stock market anyway. I’m just saying there is no evidence the stock market will do worse under Democratic presidents than Republicans. If anything, the evidence points the other way.

/zigman2/quotes/210599714/realtime
US : S&P US
3,859.99
+8.14 +0.21%
Volume: 1.96B
Jan. 21, 2021 3:44p
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