If you recall, back in August I wrote a brief article called “It’s the Economy Stupid”. In this I
pointed out that the economic cycle plays more of a role in how the markets perform than
who sits in the White House.
We have finally gotten through another presidential election and again the investing news
is dominated with articles on how the market’s performed under President Trump last go
and how people think they will perform under this new administration. Instead of simply
sending out my August article again, I came across some new data by one of my favorites
Charlie Bilello who writes for Creative Planning.
Charlie did some digging and went back to every US President’s full term or terms and
discovered the rate of return during each administration. I of course liked what I saw as it
further backed up my own research. Here is some of the data collected:
As you can see, the only President’s with sour market returns were Hoover, FDR’s second
term, and both of W’s. If you dig a little deeper into W’s terms you will see that his terms
included two major recessions (Dot Com Bubble and Housing Crisis). Again, I point out
that these two had nothing to do with who was in the White House but the economic cycle
as a whole.
If you like to drive yourself crazy and read much social media, you have been inundated
with the posts (as they do every election) where people rant and rave about how good or
bad a candidate would be. They tend to choose to very specific data to either hate or love.
But would have happened to these folks if they pulled all their money out of the stock
market based on which party was in office? How would they have done then? Charlie
Bilello struck again with even more data.
Well, isn’t that telling! This would tell me that the correct method for investing is to be
invested no matter who is in office. I am willing to bet that you have heard that before and
not just from me.
Dawn Babbitt CPA and I recently had dinner with the team over at Ryan Krueger’s outfit
Freedom Day Solutions. Since this was something, Ryan put together let me tell you it was
simply out of sight. I won’t go into the details on the five-course meal that was prepared
but I will tell you that the food was not the best thing ingested that evening. It was a quote
from our own CPA wonder Dawn. “The only way to beat a narcissist is with numbers.” The
entire room had to take a moment and digest that one but how true that is! So please use
the above numbers if you find yourself in a social media argument with a real narcissist
who knows everything about investing under different presidents. Just give them the
numbers.
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