Presidential Elections and The Stock Market: Is There Any Correlation?- 10.20
Michael D'Angelo- October 2020
2020 has been anything but ordinary, and you have an election year truly like no other.
Of course, past performance is no guarantee or indicator of future performance. But as an investor, it may interest you to see how the stock market has performed historically during and after presidential elections years. Below we’ve charted out the S&P 500 returns since the 2000 election:
Election Year | Presidential Candidates | Performance During Election Year | Performance For Following Year |
2000 | Bush vs. Gore | -9.10%* | -11.89%* |
2004 | Bush vs. Kerry | +10.88% | +4.91% |
2008 | Obama vs. McCain | -37.0%* | +26.46% |
2012 | Obama vs. Romney | +16.0% | +15.06% |
2016 | Trump vs. Clinton | +11.96% | +21.83% |
2020 | Trump vs. Biden | +9.26% | ? |
*Recessionary Periods
Additionally, below shows the S&P 500’s percentage of return during a president’s full 8 year term dating back to 1981:
President | Years | S&P 500 Return |
Donald J. Trump (R) | 2017- | +54.72% |
Barack H. Obama (D) | 2009-2017 | +182% |
George W. Bush (R) | 2001-2009 | -40%* |
Bill J. Clinton (D) | 1993-2001 | +210% |
George H.W. Bush (R) | 1989-1993 | +51% |
Ronald W. Reagan (R) | 1981-1989 | +117% |
*Recessionary Periods
Historically speaking, there have been a number of outside factors that determine the stock market’s performance - more so than simply which party is in power. These other factors could include whether or not we’re in a bull or bear market, the business cycle, civil unrest (at home and overseas), trade wars, tax policy changes and more.
If the upcoming election has you worried about the future of your portfolio, take some time now to speak with us. We will be able to provide important insight into whether or not your asset allocation should be readjusted and review any plans you may have already put in place.