In today’s 24/7 news cycle, it’s easy to believe the economy is collapsing. Respectfully, if you believe that, you might be consuming too much biased news.
Yes, prices are high and expenses are soaring. But wages have outpaced inflation for 18 months. Unemployment remains very low, and since May 2021, job openings have exceeded the number of unemployed people. A record number of Americans flew during the 4th of July holiday this year, which doesn’t happen in a failing economy.
Additionally, the stock market is near its all-time highs. Markets are forward-looking, so a strong market suggests optimism about the economy’s near-term future.
Conversely, if you think everything is perfect, you might be following overly positive news sources. Grocery prices have soared by 26% over the past 4 years, housing is increasingly unaffordable, and insurance premiums are skyrocketing. Gas prices, although down from last year, are up nearly $1 per gallon since 2019.
Life is costly these days. However, expecting a new president to flip a switch and change everything shows a misunderstanding of how the economy, Wall Street, and Washington work.
It’s frustrating to see people missing out on financial gains because they’re scared by the media. The truth is, the market’s performance isn’t significantly affected by the political party in power. Historically, the S&P 500 has shown consistent growth regardless of whether a Democrat or Republican is in the White House.
The news often exaggerates to keep viewers engaged. Instead of getting caught up in the fear, focus on hobbies and let your investments grow over time. The market tends to rise in the long term, so don’t let media-induced panic deter you from potential gains.
Sven Franssen