Elections and Markets

Does the stock market care who wins the presidential election? Not at all. Let’s take a walk through history.

From 1923 to 1929, “Silent Cal”, Republican Calvin Coolidge, was our president. During this time, Republicans controlled both houses of Congress. From January 1, 2026, our earliest data, until the end of Coolidge’s term, $100 in the S&P 500 would have grown to $233. The man for whom “the business of America is business” oversaw a booming stock market.

Note that all future growth numbers use the S&P 500 as a proxy for the stock market.

HISTORY BY PRESIDENT Herbert Hoover? Also a Republican with a Republican senate and split House. Your $100 when he took office was worth just $28 at the end of February 2033.

Democrat FDR served more than three terms with both houses of Congress controlled by Democrats. World War II saw a lifting of the stock market from the challenges of the Great Depression. $100 invested in March 1933 was $461 in March 1945. Though you would have to stay invested for twelve years. Few of us can see beyond five years.

Democrat Harry Truman with a split Congress - $100 to $310. Republican Dwight Eisenhower with a split Congress - $100 to $305. JFK with a Democratic Congress - $100 to $139. LBJ with a Democratic Congress - $100 to $166. Republican Nixon with a Democratic Congress - $100 to $92. Ford with a Democratic Congress. $100 to $151.

Jimmy Carter, with a solid Democratic Congress? $100 to $155, though you would need to hold several years before you picked up that $55.

Reagan with a split Senate and Democratic Congress? $100 to $289. Bush Senior with a Democratic Congress - $100 to $179. Clinton with a split Congress - $100 to $386. Bush Junior with a split Congress - $100 to $79. Obama with a split Congress- $100 to $294. Trump with a Republican Senate and split House - $100 to $181. And Biden with a Democratic Senate and split House - $100 to $133, as of the end of 2023. More to tell on the Biden presidency though it is trending well.

TENURE Of the 17 presidents referenced in this note, only Trump, Bush Senior, Carter, Ford, Nixon, Kennedy, and Hoover served less than two full terms. And only Kennedy and Ford served less than one term. The point? Stock market investing is a long game, meaning more than a few months. We recommend an absolute minimum of a five-year horizon.

OUTCOME BY PARTY During only three of the 17 referenced administrations was the S&P 500 down for the tenure of the president. These were Hoover, Nixon, and Bush Junior, all Republicans. And two of those three, Hoover and Nixon, served less than two terms. Does this speak to Republican governance or shortness of tenure?

TAKE AWAYS? If you make the assessment by which party is in the White House, history might suggest we are better off with Democratic presidents. The question of academics, futurists and think tank authors is always whether the man or woman makes history, or history makes the man or woman. I’ll let others ponder that.

Two lessons from all this for me. First is to mentally delink my approach to the stock market to any particular political outcomes. There is no correlation. The second? Time. Stay invested, don’t panic, allow time to do its most excellent work when it comes to investing in the stock market.