The Market and the President

In the never-ending news cycle coming out of Washington these days, we thought you might value this viewpoint, which includes the historical interplay between market performance and the Oval Office.

Per Joe Monaco, Ph.D., of Monaco Capital Management:

“...Presidents are important, but [history shows that] they are far more important to social policies and foreign affairs than they are to the financial markets.

Historically, on average the stock market rises in value four out of every five years. According to MCM research, since 1950 we have seen 36 years with Republican presidents and 30 years with Democratic presidents. In those 66 years, large company stocks have averaged roughly 9% per year growth during Republican administrations and 11% per year during Democratic administrations. The stock market has been up 54 of those years and down 12 of those years. Five declining markets have come under Republicans, four under Democrats and three overlapped.

While past performance does not guarantee future results, the numbers clearly show that, historically, political rhetoric does not match reality. In other words, as far as the financial markets are concerned, it [has not] . . . significantly matter[ed] which party [has] control[ed]... the White House."

As we’ve shared before, we believe that many stocks, here and abroad, are supported by a global economic expansion, and are essentially “shrugging off” political news. As always, please let us know your thoughts and questions.