Personal Investor

Politicians don’t radically re-engineer the economy or dramatically alter economic growth

November 9, 2022

Investors are concerned that a political party might drastically re-engineer the economy. The economy has been remarkably consistent in terms of consumption, business investment, and government spending as a percentage of gross domestic product (GDP) across multiple governments. Economic activity, as measured by the median annualized quarterly percent change in US GDP, has been very similar under both single party and divided government rule.

Monetary policy matters more

Personal Investor

November 3, 2022

Monetary policy has historically impacted Presidents in a positive or negative manner. Presidents Clinton and Obama (and for a while Bush II) benefited from prolonged periods of benign inflation and easy monetary policy. Strong market returns under President Obama occurred during single-party Democratic rule, as well as during a divided government.

Despite the fact that stocks have moved steadily higher over long periods of time, history tells us that bear markets (an extended 20% or more decline) and other difficult patches aren't permanent. The good news is that corrections (a 10% or more drop), bear markets (extended periods of 20% or more declines), and other difficult patches haven't lasted forever.

Shrinkflation: The Silent Economic Threat That's Affecting Your Everyday Life

Personal Investor

April 19, 2022

Shrinkflation: The Silent Economic Threat That's Affecting Your Everyday Life When the price of anything rises, that means the value of that item has decreased. Shrinking prices are just that: the price of something is decreasing. These two phenomena can be difficult to tell apart, but they are very much connected. Shrinking prices are the result of inflation. The price of something is rising so it makes sense that you would pay more for it over time. So, how can you tell that you’re seeing the effects of shrinking prices instead of just seeing a natural rise in prices? Here are some of the most common signs.