Ep. 1892: Red Hot or Icy Blue?

Don and Tom tackle the strange psychology of politics and investing, exploring how Republicans and Democrats consistently perceive the economy and markets differently depending on who occupies the White House. Drawing on research from Spencer Jakab, the University of Michigan, and Dimensional Fund Advisors, they argue that long-term market performance has historically shown little correlation to presidential party affiliation, despite investors’ emotional reactions. The episode also features a thoughtful listener discussion about pensions in public safety careers, including the hidden risks of not paying into Social Security and the limitations of pensions as wealth-building tools. Additional listener questions cover Vanguard target-date fund combinations and the drawbacks of holding a costly variable annuity inside an IRA. The show wraps with commentary on pay-to-play podcast awards, Don’s surprisingly modest Amazon book ranking triumph, and updates on his upcoming Civil War novel The Line Uncrossed which has been pre-released for podcast listeners in an exclusive ebook bonus package at donmcdonald.com0:05 Politics, perception, and the “presidential puzzle”2:26 Partisan views on the economy and stock market3:51 Why presidents have limited long-term market impact6:03 Emotions, investing, and politically themed ETFs8:18 Why asset allocation matters more than politics8:51 Performance of the MAGA ETF vs. expectations10:51 Listener question: pensions, Social Security, and public safety careers15:11 The importance of supplemental retirement savings alongside pensions16:38 Why pensions provide income but not generational wealth19:45 Listener question: mixing Vanguard Target Date 2035 and 2040 funds21:48 Debate over “rebalancing” target-date funds22:57 Listener question: variable annuity inside an IRA at Edward Jones24:28 Why variable annuities can be expensive and inefficient25:11 Fake podcast awards and pay-to-play recognition schemes27:07 “Financial Physics” Amazon ranking discussion28:32 Don’s upcoming novel The Line Uncrossed and Civil War inspirationQuestions? Comments? Click!