Economics 101

Am I better off today than I was four years ago?  How about you?

Over the course of the administration under the former guy the rise of the stock market was frequently trotted-out as a personal barometer of the success of his presidency.  Until it wasn't.  Let's look at the stock market; which crashed in 2020 the last year of the Trump presidency.  

In what became known as Black Monday II, this was one of three days March of 2020 that the sell-offs were so extreme that the New York Stock Exchange temporarily suspended trading.  The Dow Jones Industrial Average plummeted nearly 3,000 points, wiping out 13 percent of its value.

The cratering stock market presaged the coming economic calamity including a unemployment rate that would more than triple to a high of 13 percent. 

To be clear, I think presidents get too much blame for bad economies and take too much credit for strong economies.  Truthfully, it is a heavy lift for a president to move something as complex as the US economy.  Nevertheless, as of the publication of this post the broad market indices have doubled since their nadir in 2020.

Since I no longer have a day job I have to rely on my savings and investments for income.  So, yes, I am better off today than I was four years ago.

Of course I'm smart enough to know markets periodically correct.  And investing in a single index does not constitute a diversified portfolio or appropriate investment policy.  I am also smart enough to understand you should not solely conflate the rise of a stock market as a barometer of economic success.  That can lead to a bad case of schadenfreude. 

Pro Tip - Significant market corrections can present opportunity for savvy investors.  Another reason I prospered as a consequence of all four years of the Trump presidency.  Same for Biden.