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    Sunday, November 9, 2014

    14 Facts, Part 3: The Stock Market Run-Up Myth

    In the "14 Facts" series today, I'll take on another.

    4. The stock market continues to set new records since President Obama has been in office.

    This is indeed true, and it's a good thing for investors that stocks are performing well.  As an investor myself, there is actually an historical trend of the stock market performing pretty well during Dem administrations. If there was one single thing I agree that Dems should have done during this cycle that they didn't do, it's trumpet the stock market.

    Why didn't they? 

    Well, when a large part of your commercial appeal is income inequality and class envy, do you really want to run on the fact that you are the party bought and paid for by Wall Street and investment bankers?

    But, the stock market does not exist in a vacuum, and the president's policies are not the only thing that impacts it.  Since the crash, the Fed has pursued an easy money policy that has investors (a lot of them institutional) looking for places to spend that easy money, and in an era where corporations are not spending capital dollars, that money is finding it's way into stocks.

    So, yes, the stock market has done very well, but, to say it's all due to Obama and his policies ignores the more important impact from the Fed.  

    Time Magazine, no right wing mouthpiece, explains the Fed's role in this very recent article, and cautions that sell-offs have occurred the last 2 times the Fed has eased off on the accelerator.  so, maybe it's time to sell? 

    See: http://time.com/money/3545780/federal-reserve-ends-quantitative-easing/

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