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I recently received an email from a reader asking why I hadn’t made a specific type of stock recommendation in a while.

“Is it because of our failing economy?” he asked. “And does this mean that until we have a new president, it’s in the tank?”

Respectfully, the only way you could think that the economy is failing would be if you’re consuming too much news from biased sources.

Sure, prices are too high. Things have gotten ridiculously expensive. But wages are making up for it – in fact, they’ve outpaced inflation for a year and a half.

Unemployment is still very low, there have been more job openings than unemployed people since May 2021, and a record number of Americans flew during the Fourth of July holiday this year. None of that happens in a failing economy.

Furthermore, the stock market is just off of its all-time highs. Markets are forward-looking mechanisms, so they tend to reflect how the economy will look in six to 12 months. There’s no guarantee, of course, but a market at all-time highs suggests a stronger economy in the near term.

On the other hand, the only way you could think everything is rainbows and unicorns would be if you’re consuming news from sources that slant things positively.

Grocery prices have increased 26% over the past four years, which equates to roughly double their historical average inflation rate. Housing is unaffordable for many, and insurance premiums are insane. Gas prices, while down slightly from a year ago, are up nearly $1 per gallon since 2019.

It costs a lot of money to be an American these days.

But if you think any new president can walk in, flip a switch, and change everything, you don’t understand how the economy, Wall Street, or Washington works.

I know I’m being harsh, but it frustrates me when I see so many people missing out on making money and offsetting those higher costs because they’ve been scared by the media.

Again, all you have to do is look at the market. If the economy is failing, stocks don’t race higher (unless things are about to get better, like in early 2009).

I bet you that most of the folks in the media who write and say all the scary things are invested – and stay invested regardless of who is in office.

The truth is the markets don’t care which political party is in the White House. The results are pretty similar under Democratic presidents and Republican presidents.

Since 1957, the S&P 500’s average compound annual growth rate, or CAGR, under Democratic presidents is 9.8%. Under Republican presidents, it’s 6%.

However, the median annual gain is 8.9% with a Democrat and 10.2% with a Republican.

Over those 67 years, you could’ve achieved a 7.4% CAGR simply by ignoring all of the nonsense and staying in the market. (With dividends reinvested, that CAGR rises to 10.5%.) Plus, you’d have had a lot less stress in your life, because you wouldn’t have been worrying about whether Barack Obama was going to tank the market and the economy (he didn’t) or whether Donald Trump was going to destroy the world (he didn’t).

Remember, the news is there to scare you. Who would watch a news report that said things like these?

• BREAKING NEWS: No one was randomly murdered in our city tonight.
• After the break, we’ll tell you how 100% of the flights that took off in the U.S. today landed safely and had no mechanical issues.
• Stay tuned to learn about a young mother who left her husband and three kids to go to work this morning and returned to them in the early evening without incident.

Covering those kinds of stories wouldn’t be very good for ratings, but fortunately, they’re the reality for most of us. That’s one of the reasons the market rises over the long term regardless of what’s happening in the world. (Case in point: Since January 2021, the S&P 500 is up 47% – significantly more than grocery and gas prices have risen.)

If you want to be aggravated by “news” that is often biased at best and just plain false at worst, keep watching and clicking.

But I suggest that you spend your time on sports, art, or other hobbies and stay out of the way of your money. It will keep growing – as long as you don’t buy what the media is selling.

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