Fox Business reported today that the Dow has gained 10,000 points since Trump’s election.
The article reports:
The Dow Jones Industrial Average crossed 28,332.74 on Monday, meaning it has rallied 10,000 points, or more than 54 percent, since Trump’s election victory on November 8, 2016. The benchmark S&P 500 has gained more than 46 percent.
“The rally has been driven by pro-growth measures, de-escalation of trade tensions, huge liquidity injections by central banks and a FOMO approach by investors worried about missing out on a remarkable U.S. market outperformance that has set one record high after the other.” Mohamed El-Arian, chief economic adviser at Allianz, told FOX Business.
So if you are an average working American, why does this matter to you? First of all, most Americans have 401k plans. As the stock market rises, the value of those plans rises. However, there is another often overlooked aspect of a growing stock market. Many communities, counties, and states have pension plans for former employees. These are unfunded liabilities. That means that those payments are not considered when drafting budgets. Those payments are made from investment accounts. As the stock market rises, the possibility of having to decrease these payments diminishes and the possibility of the municipality involved having to raise taxes to cover these payments also decreases. People who work gain by both having the value of their retirement accounts increase and by not having to pay higher taxes to cover retirement costs.