Here is link to an interesting graph from Yahoo – contrasting S&P 500 Performance by under Presidents from the late sixties (Nixon’s first term) to the present. Those of us who have 401Ks or other capital with investments in the stock market should find this especially relevant.
We spend far too much time arguing about opinions here (who’s a racist/who’s a socialist/what did Mueller find). This is a nice change – just the facts.
Looking at a 52 year trend there is a striking difference: Average S&P gain during Democratic administrations was 36%, slightly more than the average Republican gain of 17.7%, although the single best performance was in Reagan’s second term.
Interestingly, given the lengthy thread on whether Obama was the worst President ever, the gains in Obama’s two terms were 34.2% and 41.1% respectively. Trump’s gain (and this was prior to Friday’s 600 point drop) was 27.6%.
So the data show that Trump’s performance lags well behind Obama’s.
As an investor, I view every stock purchase as a bet on the caliber of the company’s management team: will they create value or not. If one were investing by political party, the data make a fairly strong argument that Democrats outperform Republicans.
Funny thing: I’ve heard Donald Trump repeatedly take responsibility for how well people’s stock portfolios are doing. I’ve never heard him credit Congress. Do you think he forgot?
Of course there is a connection, particularly demonstrated by the Clinton tax increases early in his first term. The right uniformly predicted disaster but the impact was positive all around.
As far as patience goes, I’ve been building a pretty sweet-ass nest egg at 3.5% for a good while now.
A big part of me has always wanted to get into some investments, but I don’t like the idea of potentially setting myself up for failure. I’d probably get greedy one time at the worst possible time.
The good thing about a Democratic President and a Republican Congress is that the Republicans focus on budget responsibility. Never see that with a Republican President… so the critical factor is the Democratic President to align the Congress to act responsibly.
Not so cut and dried as the OP believes. The numbers may be, but not the reasons.
The big loss in the stock crash showing up as W. Bush 1, was due to the dot com bubble bursting from the over evaluations of the previous years…which also does a lot to explain the highly inflated figures for Clinton 2.
But its all a nice story if you don’t really look into the details.
Actually, it is cut and dried. You are falling into the fallacy, well explicated in Tversky and Kahnemann’s work on behavioral economics of losing sight of trends because of salient events. Every result can be explained by salient events, but they tend to distract one from a clear tend established over fifty-two years.
Tversky and Kahnemann’s Nobel Prize (economics) winning work focused on the observation that professional statisticians and economists are as prone to these fallacies as lay people.
No doubt, Reagan’s terrific second term numbers can be explained away as a function of oil prices coming way down form the highs that bedeviled Carter, but events tends to even out over time… leaving a clear trend.
The data show the impact of the President and clearly shows that over time markets do better under Democrats.
A few posters, clearly uncomfortable with this conclusion have declared that Congress is the deciding factor. What no one has bothered to do is show how the market fares based on who is in control of Congress. But Congress is being offered as the cause to deflect from the overall conclusion and the report (clear as day) that even omitting Friday’s Trump-induced market decline, the stock market did much better under President Obama than under President Trump.
Any statistician (or reasonably well educated math student) can explain this away, by the way, without any reference to Congress. But the discussion is not about facts… it is about discomfort seeing how easily one more Trump balloon ('I made you so much money in your 401K is punctured.")
I’ve been waiting for someone to point out the statistical explanation… and find it funny that a non-data-based Congress meme has come to the forefront.
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