As we enter another election season, we often field questions about how certain candidates will affect overall portfolio performance. We found the following data extremely interesting and hope it paints a broader picture of how politics affect market returns:
- The S&P 500 has an average annual growth rate of 9.8% under Democratic presidents and 6% under Republican presidents since 1957
- The S&P 500 has a median annual growth rate of 8.9% under Democratic presidents and 10.2% under Republican presidents since 1957
- The S&P 500 has grown 1,920% since 1957, compounding at 10.5% annually, regardless of who sat in the oval office [1]
The point is simple – don’t let emotions surrounding the election affect your investment strategy. Whether the White House is painted red or blue, the prudent course of action is to stay invested and stay diversified.
[1] Jennewine, Trevor. “Here’s the Average Stock Market Return under Democratic and Republican Presidents.” The Motley Fool, The Motley Fool, 2 Apr. 2024, www.fool.com/investing/2024/04/02/average-stock-market-return-democrat-republican-pr/.
