Market MakeHer Podcast 55. Replay: How did the Stock Market Perform Under Biden vs. Trump?
Oct 4, 2024
Explore the fascinating interplay between politics and the stock market. Historical data reveals that the median annualized return is 7.7% since 1900, regardless of whether a Republican or Democrat is in office. Volatility often spikes during election years, yet it doesn't greatly impact long-term performance. Insights into how market outcomes are more influenced by economic growth and corporate earnings are shared. Discover why staying invested is key, as timing the market based on political shifts may not yield the best results.
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Election Years Boost Volatility, Not Direction
- Election years raise volatility due to outcome uncertainty and seasonality like October lows and year-end rallies.
- Historically the market often rallies into year-end after uncertainty resolves, regardless of winner.
Plan For Seasonality Around Elections
- Anticipate seasonal patterns like October weakness and a Santa Claus rally when planning around election noise.
- Avoid emotional trading during heightened volatility; wait for uncertainty to clear post-election.
Party Has Little Effect On Long‑Term Returns
- The long-run median annualized return since 1900 is about 7.7%, nearly identical under both parties.
- Republicans show a marginally higher median (7.9% vs 7.7%), but the difference is negligible.