A country begins to rot if only some people get way ahead while others are left behind. Instead of voting for a president who you think will be best for your investments, vote for a president who you think will do the most good for the most number of people. As a result, if you want to get rich, your goal is to try and become an overpaid CEO.
If Tim Cook at Apple retired tomorrow, do you think the event would make a difference in Apple’s share price? There might be a knee-jerk move for one or two days, but after that, it would be back to business as usual. The same thing goes for the CEO of a large publicly-traded company. As there are so many variables that influence the S&P 500’s index performance, who is president is not a significant factor. The main lesson of this article is that a Democrat or Republican president doesn’t really affect your investment returns. A President Doesn’t Really Matter For Investment Returns The annualized S&P 500 performance under Donald Trump was 16%, higher than under Barrack Obama at 15%. Now that Joe Biden has become President, here is the annualized S&P 500 return by President, including under Donald Trump. Check out Vanguard’s future return assumptions for stocks, bonds, and real estate. Most investment houses have much lower future returns over the next 10 years. After all, the historical return for stocks since 1926 is about 10%. In my opinion, any annualized equity return 10% or greater is a home run. Therefore, it seems like a push between having a Democrat or a Republican as president for the benefit of the stock market. If we exclude Bush Junior, we see that of the top six performers, three are Republican presidents. Bush Junior was unlucky because of 911 and the wars. Bush Junior was the worst performer with a -3% annualized equities return under his presidency. Therefore, let’s get more granular and look at US equities annualized returns under each President.įrom the chart, we see that Bill Clinton tops the charts with roughly an 18% annualized equities return during his presidency. It is unlikely a Democratic president will win if this keeps up! Stock Market Performance By PresidentĮyeballing return charts is fine, but it would be better to get more specific numbers. The S&P 500 is back in bear market territory, inflation is at 40-year highs, and there’s a war in Ukraine. However, let’s look at the stock market performance details by president a little more closely.Ģ022 so far has been an abysmal year for the stock market for President Biden. Therefore, if you are a stock investor, then at the margin, you should be rooting for another Democrat as president starting in 2021. In contrast, the S&P 500 has advanced higher under every Democratic president since 1933. The index keeps marching higher regardless of who is in the White House.īut upon closer inspection, it looks like between 1968 – 19 – 2009, both periods under Republican presidents, the S&P 500 didn’t go anywhere. Your first reaction should be that the S&P 500 index doesn’t really care if a president is a Democrat or a Republican. Stock Market Performance Under A Democratic Or Republican Presidentīelow is a wonderful chart that shows the stock market performance under a Democratic and Republican president. As a result, they missed out on over 50% in S&P 500 gains. It is suboptimal to invest on emotion.įor example, I know several people who decided to sell a majority of their stock holdings in 2016 once Donald Trump won the election. The annualized S&P 500 return by President is quit consistent over history.īefore finding out the answer, I’d like you to guess under what party do you think the S&P 500 has performed the best? From there, we can compare the reality with your beliefs.Īfter all, one of the keys to being a good stock investor is to remove as much bias from your investing process as possible. Let us take a look at the historical stock market performance under a Democratic or a Republican President.
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