Politics and Your Portfolio Shouldn’t Mix

By Spencer Jakab of The WSJ. Excerpts:

"In September 2024 . . . the long-running University of Michigan survey of consumer sentiment topped 70 . . . was an abysmal 49.7 among self-identified Republicans and a stellar 92.6 among Democrats. That flipped as soon as President Trump was re-elected."

"This January, 81% of Republicans, but just 35% of Democrats, thought [the stock market will rise in the next six months] would. Those numbers were 22% and 43%, respectively, two years earlier."

"presidents don’t affect stocks much themselves"

"An exchange-traded fund with the ticker symbol “MAGA” launched in 2017."

"Another fund, “DEMZ,” launched in 2020."

"Purposely avoiding sectors or cutting exposure to stocks based on politics . . . usually is a recipe for regret." (the article mentions that neither fund has done as well as the overall market)

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See also Americans start caring more about deficits and the national debt when the party they oppose runs them up by John V. Kane of New York University and Ian G. Anson of The University of Maryland. Excerpt:

"In the past two decades, US budget deficits have skyrocketed, and the national debt is now over $22 trillion. But do Americans care about the size of deficits and the national debt? In new research, John V. Kane and Ian G. Anson find that people tend to care more about the deficits and debts when they are increased by presidents from the party that they oppose. Both Republicans and Democrats, they write, become less concerned about governments running deficits when their President is in charge."