Does the Outcome of the Presidential Election Impact My Investments? Ep #251

Do we care who wins the election? Does it actually impact our investments? The issues at stake matter to each of us for different reasons. Most Democrats think things will be better if a Democrat is voted into office. Most Republicans likely feel that things will fare better with a Republican in office. But does who wins the election actually matter when it comes to your investments? I’ll break it down in this episode of Best in Wealth.

Outline of This Episode

• [1:08] September is never a good month in the stock market
• [4:02] Stock market statistics during each presidency
• [15:32] What do we do with this information?
• [20:17] Can a President influence the stock market?

Stock market statistics during each presidency for the last 100 years

We’ve had 17 presidents since 1926. Nine of the presidents were red, eight were blue. How did the stock market fare during their presidencies?

• Calvin Coolidge (Republican) was President from 1923-1926: If you invested $1 the day he became president, that dollar would’ve turned into $2.33
• Herbert Hoover (Republican) was president from 1929-1933, during the Great Recession: Inflation was -0.7%. The annual GDP was negative 7.5%. Your $1 would’ve dwindled to $0.28.
• Franklin D. Roosevelt (Democrat) was president from 1933-1945: Democrats controlled the Senate and the House. Unemployment was 25.6%. The average GDP was 9.4%. Your $1 doubled twice and then some—becoming $4.61.
• Harry Truman (Democrat) was President from 1945-1953: Max unemployment was 7.9%. He inherited the end of Hoover’s recession. Annualized inflation was 5.4%. The average GDP was 1.3%. Your $1 turned into $3.10.
• Dwight Eisenhower (Republican) was President from 1953–1961. Max unemployment was 7.5%. The average inflation was 1.4%. The average GDP was 3%. There were three different recessions during his term in office. Your $1 turned into $3.05.
• John F. Kennedy (Democrat) was President from 1961-1963. Democrats controlled the House and Senate. Max unemployment was 7.1%. The average inflation was 1.2%. The average GDP was 4.4%. Your $1 turned into $1.39.
• Linden B. Johnson (Democrat) was President from 1963-1969. Democrats controlled the House and Senate. Max unemployment was 5.7%. The average inflation was 2.8%. The average GDP was 5.3%. Your $1 turned into $1.66.
• Richard Nixon (Republican) was President from 1969-1974: Democrats controlled the House and Senate. Max unemployment was 6.1%. The average inflation was 6%. The average GDP was 2.8%. Your $1 stayed $1.
• Gerald Ford (Republican) was President from 1974-1977: Democrats controlled the House and Senate. Max unemployment was 9%. The average inflation was 6.5%. The average GDP was 2.6%. There was a huge recession when he first started. Your $1 turned into $1.51.
• James (Jimmy) Carter (Democrat) was president from 1977-1981: Democrats controlled the House and Senate. Maximum unemployment was 7.8%. The average inflation was 10.2%. The average GDP was 3.3%. Your $1 turned into $1.55.
• Ronald Reagan (Republican) was president from 1981-1989: Democrats controlled the House and the Senate was mixed. Max unemployment was 10.8%. The average inflation was 4.2%. The average GDP was 3.5%. Your $1 turned into $2.89.
• George H. W. Bush (Republican) was President from 1989-1993: Democrats controlled the Senate and the House. Maximum unemployment was 7.8%. The average inflation was 4%. The average GDP was 2.2%. Your $1 turned into $1.79.
• Bill Clinton (democrat) was President from 1993-2001: He had a mixed Senate and mixed House. Maximum unemployment was 7.3%. The average inflation was 2.5%. The average GDP was 3.9%. Your $1 turned into $3.56.
• George W. Bush (Republican) was President from 2001-2009: He had a mixed Senate and mixed House. His Presidency lived through the dot-com bubble and then the Great Recession. Maximum unemployment was 7.3%. The average inflation was 2.3%. The average GDP was 2.2%. Your $1 turned into $0.79.
• Barack Obama (Democrat) was President from 2009–2017: He had a mixed Senate and Mixed House. Maximum unemployment was 10%. The average inflation was 1.7%. The average GDP was 1.7%. Your $1 turned into $2.94.
• Donald Trump (Republican) was President from 2017-2021: Republicans controlled the Senate and the House was mixed. Maximum unemployment was 14.8%. Hit a recession in 2020. The average inflation was 1.8%. The average GDP was 1.4%. Your $1 turned into $1.81.
• Joe Biden (Democrat) has been President since 2021: Republicans have controlled the Senate with a mixed House. Maximum unemployment was 6.4%. The average inflation was 5.5%. The average GDP was 3.4%. Your $1 turned into $1.33.

Whew. Alright. Now, what do we do with this information?

What should you do if your preferred President isn’t elected?

While you may be tempted to drop out of the market, that’s never the answer. 15 out of the 17 Presidents had positive returns in the stock market. That means that 88% of the time, we’ve seen positive returns in the stock market. We only saw negative returns during the Great Depression and under Bush during the Dot-com bubble and Great Recession.

If you invested $1 in 1926, that $1 would be worth well over $10,000 right now. If you only invested that money when your preferred President was in office, you’d only have half that amount. You’d miss out on so many returns.

Remember, we’re investing in companies—not Presidents. The S&P 500 averages over 10% returns every year. There’s no data we can come up with that would tell us to get out of the market depending on who is elected. Who is elected never matters for your investments.

Resources Mentioned

• Stocks often drop in September — but many investors shouldn’t care

Connect With Scott Wellens

• Schedule a discovery call with Scott
• Send a message to Scott
• Visit Fortress Planning Group
• Connect with Scott on LinkedIn
• Follow Scott on Twitter
• Fortress Planning Group on Facebook

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Podcast Disclaimer:

The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

About the author, Scott Wellens

Scott Wellens, CFP® is an investment advisor and founder of Fortress Planning Group. After earning his Bachelor of Science degree from the University of Wisconsin-Oshkosh, Scott quickly ascended to become a Vice President of North American Sales at a major regional provider of telecommunications infrastructure. While financially successful in this role, Scott searched for ways to pursue his passion related to financial literacy and providing financial freedom for both his own family and others. During his search, Scott became curious about the significant gap he found in the financial services sector: he was unable to find a comprehensive financial planner that maintained a family stewardship lens without being attached to financial products. Scott decided to fill that gap by creating his own planning firm that maintains a strong passion for comprehensive, unbiased wealth planning that is genuinely client-centered.

Scott resides in Menomonee Falls, WI with his family. He is the father of three active and independent daughters who keep him on his toes. Scott is an active community member, serving on the Hamilton Education Foundation Board, serves as a Dave Ramsey Financial Peace facilitator and leads the All Pro Dad’s group at their local elementary school. Scott enjoys spending his free time visiting state parks with his family, reading, and watching the Milwaukee Bucks and the Green Bay Packers win ball games.

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