Another drop for stocks on Friday helped drag Wall Street to its first losing week in the last six. President Joe Biden is boasting about the recent stock market rally. He’s right that stocks have been on a tear for the last 14 months. The S&P 500 hit 5,000 for the first time in history. That’s up from 500 some 30 years ago.
Yes, it’s true that in nominal terms stocks are at record highs. But one of the first rules of investing is that you need to pay attention to your-inflation profits. If you make an investment in a widget company and in 10 years that stock has doubled in value but the price level in dollars of everything else has doubled, sorry, you’re no better off based on what you can buy with those profits.
Biden’s performance is also much worse than the bull market under Donald Trump. The S&P was up 36% in real terms at this time of Trump’s presidency, or more than four times better.