The holiday season is a good time to give gratitude for our loved ones.
Here’s one more thing investors can be thankful for: The nearly 30% return in U.S. stocks so far this year.
This is despite Americans being bombarded with negative messages of the health care reform. TIME printed a busted “Obamacare” pill accompanied by the headline, “Broken Promise: What It Means for This Presidency.” The Economist features an image of President Barack Obama sinking in water with the headline, “The man who used to walk on water.” This November, Obama’s approval rating sank to a new all-time low.
While the government may not function well right now, there is a lot that is working well in America. The stock market reflects that, even though the headlines don’t.
Take a look at the chart below, which shows President Obama’s second-term presidential cycle in comparison with four-year presidential cycles from 1929 through 1940 and the presidential cycles from 1953 through 2012. The current cycle beats both of the historical trends.
To me, the chart indicates that investors who ignore the negative headlines and focus on the strength of the U.S. stock market are the ones who have been very profitable this year.