By Brett Arends
Uncle Alfred: That Nancy Pelosi is going to destroy the economy. She must be a socialist. She’s even from California!
You: Nancy Pelosi has somewhere up to $80 million of her own money invested in stocks. Do you really think she’s going to tank her own portfolio?
Uncle Alfred: What about that AOC and her Green New Deal? She’s going to kill the energy industry! We’re all going to have windmills on our roofs and have to go everywhere on trams powered by manure.
You: Well, she’s only one Congressperson out of 435. And the stock market doesn’t seem to be worrying. Energy stocks are up since the election. Exxon’s /zigman2/quotes/204455864/composite XOM +0.80% up about 20% just in a couple of weeks. And they went down under Trump. Literally, overall energy stocks /zigman2/quotes/206420077/composite XLE +1.47% lost about 40% on his watch. Oh, and they doubled under Obama. Literally: About a 100% total return.
Uncle Alfred: OK, what about inflation? We’d better all put our 401(k)s in gold because it’s going to go through the roof! I remember what happened under Jimmy Carter.
Aunt Jemmy: Oh, I liked that Jimmy Carter. Not such a good president but such a nice man. Do you know he’s spent all his time since he left office building affordable housing for people in need?
Uncle Alfred: (Mumbles and takes a mouthful of stuffing)
You: Well, the bond market’s not worried. It’s predicting inflation of less than 2% a year for the next ten years. That hasn’t changed since the election.
Anyway, gold’s been doing much better under Republican presidents lately than Democrats. It tripled under George W. Bush, and is up 50% under Trump. It actually went down under Clinton and it went up just 4% a year under Obama. So maybe gold investors are more worried about Republicans than Democrats?
Uncle Alfred: OK, then, know-it-all: What’s the stock market going to do next?
You: I can only quote John Rockefeller or J.P. Morgan Sr. There’s an old Wall Street legend that someone asked one of them — nobody can agree which one — that very same question, and he replied: “It will fluctuate.” Could you pass the stuffing please?