Yes. There’s a rather interesting asymmetry there. The left-leaning press is quite reasonably focused on purchasing power, because inflation is something virtually everybody encounters. But it can overlook the other side of the household balance sheet: what people own has been doing very well.
As of the end of August, the S&P 500 was up about 12.3% for the year, and retirement accounts have benefited accordingly. Fidelity reported that the average 401(k) balance jumped 10.5% in the second quarter alone, while the number of 401(k) millionaires reached a record 769,000.
And there's an interesting bit of polling that supports your observation. Pew found that only 18% of Americans were very concerned about the stock market, compared with 62% concerned about housing costs and 56% about gasoline. So the media may actually be reflecting what people tell pollsters: prices hurt me every week; my IRA is something I look at occasionally.
But there's a second effect that I think is easy to miss. Inflation and stock-market performance affect different people differently. A retiree with $2 million in equities can see a six-figure increase in his portfolio while simultaneously complaining about the price of groceries. Someone with little or no investment wealth gets essentially none of the upside from the market.
And that's where the political interpretation gets tricky. The research published this summer found that declining real wages, rather than inflation by itself, are particularly predictive of voters punishing the incumbent. That's a much more sensible political measure than simply saying "inflation is X%."
The right-wing press, of course, tends to make the mirror-image mistake: look at the stock market, look at employment, look at corporate profits—everything is wonderful! Meanwhile, someone whose rent, insurance, food and electricity have risen substantially doesn't experience the economy as wonderful.
So I think you're seeing a genuine media-selection problem rather than simply partisan dishonesty. Each side has a convenient economic statistic that reinforces its preferred narrative.
And for somebody like you, with most of his financial life in equities, the stock-market number is hardly an abstraction. A 12% increase in a large IRA is an enormous change in financial circumstances, even if the price of chicken went up another 8%. The political press tends to talk about "the economy" as though everyone owns the same hypothetical American household balance sheet. They very much don't.
Exactly—and that illustrates why the inflation story can be misleading when applied uniformly.
You're experiencing inflation in Cambodia, but from a substantially lower cost base than the U.S., while your principal source of wealth is largely exposed to the U.S. equity market. So you have two quite different forces operating:
your expenses are rising, but your asset base is rising faster.
And the IRA withdrawals make the comparison especially interesting. Required distributions create a peculiar situation for a wealthy retiree: you're being forced to take money out, pay ordinary income tax on it, and then spend whatever portion you actually need. Yet if the underlying portfolio is appreciating faster than the combination of RMDs + taxes + living expenses, your net wealth can continue increasing.
That's a very different economic experience from someone living primarily on wages.
It also explains something the political discussion frequently misses: inflation isn't inherently synonymous with economic distress. What matters to an individual is something closer to:
growth in after-tax wealth and income relative to growth in the cost of maintaining one's life.
For someone with substantial invested assets, a 3–4% increase in the cost of living can be almost incidental in a year when the portfolio appreciates 10–15%. For someone with no meaningful assets, that same 3–4% can be quite painful.
And there's a delicious irony in the RMD system: the government gets its tax revenue precisely because you've accumulated enough money that the IRS insists on taking some of it out of tax-deferred accounts. That's a rather different problem from wondering whether you'll have enough money to retire. 😄
Yes, and I think that's a more sophisticated distinction than the usual "which president is good for the stock market?" argument.
The president's direct effect on corporate earnings and stock valuations is often exaggerated. What you are describing is the regulatory and administrative environment: thousands of decisions made by agencies, regulators, enforcement offices, and the people appointed to run them. Labor rules, antitrust enforcement, environmental regulation, trade policy, securities regulation, Commerce Department decisions, and so forth can cumulatively matter quite a lot to corporations.
So your position can quite coherently be:
"I vote Democratic because I care more about social questions than about maximizing my investment returns, while believing that, on average, Republican administrations are friendlier to corporations and therefore probably somewhat better for shareholders."
There's no contradiction whatsoever. In fact, separating political preferences from financial self-interest is probably healthier than pretending one's preferred economic policy must also be the policy that produces the best personal portfolio.
And your point about who actually makes the decisions is important. The difference isn't merely whether Biden or Trump signs a particular bill. A president appoints thousands of people, and those people administer statutes with considerable discretion. Two administrations operating under exactly the same statutory framework can produce quite different regulatory environments.
The stock market, meanwhile, is perfectly capable of saying, "Thank you very much, whichever party you voted for." 😄
Given your circumstances, there's also an amusing inversion: you can vote according to your principles and let your portfolio vote according to its own interests. Your stocks don't appear to care that their owner is a Democrat.
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