Whether you think today's White House announcement on capital gains is good policy or bad, it shows the immediacy of market responses.
Stocks immediately fell on the Biden announcement. The average close across the big 3 indices about 1% down from yesterday.
But what does that really mean? Well, let's look at the numbers.
Roughly 41 million people in America are so-called retail investors -- they have stocks, bonds or other financial assets in non-retirement accounts. The average value of those accounts is about $100k, with a long tail on both sides of that figure.
Call it a $1,000 loss to the average account today.
Across 41 million accounts, that's $41 billion -- more than the federal government spends on science in a year. More than five times what the feds spend on public housing.
All in less than an hour. Because of a funding proposal that may not pass.
The lesson probably varies with where you fall on the political spectrum. But hopefully, everyone can agree that after four years of policy by random Tweet and coming off of the economic shock of the pandemic, those who lead should recognize people -- and markets -- are still easily spooked.