![]() ![]() ![]() The idea of "Trump stocks" and "Biden stocks" remains very real. Presidential elections can and will continue to have more specific consequences for the market's various sectors and indices, depending on each party's agenda and how much of Washington they control. Important to remember is that all of this information is looking at the performance of the broader stock market. Interestingly, international equities also outperform under Democrats, though emerging-markets stocks have the edge under GOP presidents. But clearly, American stocks have also done well under Trump. equities have grown 14.5% on average while Democrats control the White House, according to YCharts data, against just 3% under Republican control. Since Bill Clinton's inauguration in 1993, U.S. This trend is even more pronounced in recent decades. "The average Republican administration over that time period saw gains of 3.5% per year, while the Democrats saw gains of almost twice as much, at 6.7% per year." "When we do see a political influence, it is not what might be expected," writes Brad McMillan, chief investment officer for Commonwealth Financial Network. Conventional wisdom might suggest that Republicans, who are supposedly more business-friendly than the Democrats, would be more beneficial for your stock holdings. You might feel strongly about one party or the other when it comes to your politics, but when it comes to your portfolio, it doesn't matter much which party wins the White House.īespoke Research shows that since 1900, the Dow Jones Industrial Average has gained 4.8% annually. 19 of 2020, stocks have lost 2.5%, using the DJIA as a proxy. The Dow Jones Industrial Average put together 32.1% returns during the first 365 days President Donald Trump was in office, followed by a 5.2% decline in his second year, and an 18.8% rebound in his third. In George Bush's final year of service (January 2008 through January 2009), for instance, the Dow sank nearly 32%.īut no one needs to tell you that the current cycle is anything but average. (Returns are based on price only and exclude dividends.) The year before an election year is historically the strongest, at 13.3% returns, then things slow down considerably, to 5.4% returns in election years. Since 1930, the Dow Jones Industrial Average has gained an average of 10.0% in a president's first year and 7.9% in the second, according to YCharts data. ![]()
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