Are the Democrats Screwed by the Stock Market?

Perhaps the question should be, are most Americans screwed by the stock market?  But, I'll stick with my premise.  Is the average American even in the stock market?  It turns out that the majority of Americans have some money in the stock market, either in a retirement fund, or some other type of investment.  It also turns out that the average American doesn't actually have much money in the stock market, certainly not enough to make a difference in their lives.  That may be the most important thing that I verified in writing this blog.  The average American doesn't have adequate savings, much less the disposable assets to put in the stock market.  A vast amount of stock market assets are owned by the wealthiest people.  That shouldn't be a surprise.  From a trickle down perspective, the pundits would say that benefits the rest of Americans.  Maybe.  That might have to be the topic of another blog.

Today's blog is about politics, but from the perspective of the stock market.  The stock market reacts to psychology.  Irrational exuberance was a term used by Alan Greenspan.  The stock market went up during the Obama administration. Why?  The market liked what was happening.  The banks were bailed out.  Interest rates went down.  What's not to like?  During the trump administration, the market has been happy, except when it isn't.  The market looks like an EKG, because trump says one thing one day and another thing the next, roiling the market.  Over time, the market has factored this in, and realized that the net impact of what's going on, which isn't really a lot in my opinion, is good for the market and therefore good for the stock market.

Why are the Democrats screwed?  Because the market has bought into the idea that Democrats will be bad for the economy.  Whether it is true or not doesn't matter, if the market believes it! The more progressive Democrats are not doing the market any favors by embracing socialism, even if what they're talking about isn't even close to being socialism.  Socialism is a nasty word to the U.S. market. It always has been, and it always will be.  Elizabeth Warren could have taken a more measured, capitalistic based approach, but has chosen not too.  She could have taken a Teddy Roosevelt Republican approach, but she has chosen not too.  Bernie Sanders...what more do I have to say.  This is probably why Biden seems to have staying power, even though you wonder when he's going to collapse every time you watch him.  He's the status quo, he's not a socialist.  He's a tinkerer, not a transformer.  The market abhors major changes.  The market hates the word socialism.  And that's why the Democrats are screwed.  Even if the Democrats win, the stock market will go down. Not because of fundamentals, but because of psychology.  The Democrats need to understand this and begin rewriting their playbook, lest the next president will also be a one term president.  Understand the stock market for what it is, and use it to your advantage.  That's one thing that I must admit that trump is good at.