The Next President Is Unlikely to Sink the Economy—or the Stock Market

Dire financial predictions about past presidents have usually proven to be wrong.

As election season heats up, you’re going to hear lots of dire predictions about what will happen if President Joe Biden or former President Donald Trump is reelected. If history is any guide, the U.S. economy and the stock market may be fine in the long run no matter who’s in office.

Ronald Reagan, 40th U.S. President, Republican, 1981-1989

• In 1980, his critics said:
  • Former actor lacks the experience to be president
  • Belligerence toward the Soviet Union could lead to nuclear war
  • Reaganomics is dangerous and won’t work
• Average U.S. GDP Growth* = 3.5%
• S&P 500 Index Average Annual Return* = 14.2%

George H.W. Bush, 41st U.S. President, Republican, 1989-1993

• In 1988, his critics said:
  • Not a strong leader like Reagan
  • Lacks vision
  • Part of the Reagan administration that doubled the national debt
• Average U.S. GDP Growth* = 2.2%
• S&P 500 Index Average Annual Return* = 15.7%

Bill Clinton, 42nd U.S. President, Democrat, 1993-2001

• In 1992, his critics said:
  • Governor of a small state – unproven on the national scale
  • Tax increases will sink the U.S. economy
  • Government takeover of healthcare will nationalize 20% of the U.S. economy
• Average U.S. GDP Growth* = 3.9%
• S&P 500 Index Average Annual Return* = 17.2%

George W. Bush, 43rd U.S. President, Republican, 2001-2009

• In 2000, his critics said: 
  • Running for president because of his last name, not his accomplishments
  • Tax cuts will only benefit the wealthy
  • No foreign policy experience – not ready for a crisis
• Average U.S. GDP Growth* = 2.2%
• S&P 500 Index Average Annual Return* = -2.9%

Barack Obama, 44th U.S. President, Democrat, 2009-2017

• In 2008, his critics said:
  • Inexperienced – only served two years in the U.S. Senate before running for president
  • Soaring rhetoric and exorbitant campaign promises are “just words”
  • Desire for a large stimulus bill and health care plan will explode the national debt
• Average U.S. GDP Growth* = 1.7%
• S&P 500 Index Average Annual Return* = 14.5%

Donald Trump, 45th U.S. President, Republican, 2017-2021

• In 2016, his critics said:
  • Never held political office
  • Doesn’t speak or act in a way that’s presidential
  • Trade war with China will damage the U.S. economy
• Average U.S. GDP Growth* = 1.4%
• S&P 500 Index Average Annual Return* = 16.0%

Joe Biden, 46th U.S. President, Democrat, 2021-present

• In 2020, his critics said:
  • Too old to be president
  • Career politician
  • More of a vice president than a president
• Average U.S. GDP Growth* = 3.7%
• S&P 500 Index Average Annual Return* = 10.2%

Don’t fret if your preferred candidate doesn’t get elected in November! The U.S. economy and stock market have generally marched higher through Democratic and Republican administrations alike. Dramatic events such as 9/11, the global financial crisis and the COVID-19 pandemic can cause sharp market sell offs, but our economy and stock market have historically been resilient to these types of shocks.

Bluff City Advisory Group can help you stay focused on your long-term goals regardless of who’s in the White House.

 

*GDP is calculated beginning on Jan. 1 of the year a president is elected; S&P 500 Index returns are calculated beginning on Inauguration Day. For President Biden, GDP is as of 9/30/23 (most recent data available), and S&P 500 Index returns are as of 12/31/23. Data Sources: U.S. Bureau of Economic Analysis and IMF via FactSet, Morningstar, and Hartford Funds, 1/24. S&P 500 Index is a market capitalization-weighted price index composed of 500 widely held common stocks.

Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. For illustrative purposes only. Investing involves risk, including the possible loss of principal. This material is provided for educational purposes only.