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Politics are an emotional mine field these days.  Both Democrats and Republicans seem certain that a loss for their presidential candidate will spell catastrophe for the financial markets based on differing opinions on tax policies, economic stimulus plans, and other issues.  And last week’s announcement that President Trump tested positive for COVID-19 only added gasoline to the fire.

Personal feelings aside, history has shown that financial markets don’t care who is president.

As the interactive chart below shows, over the past 100 years of US presidential terms, US equities have continued their upward climb regardless of who was in office.


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Click on FDR’s photo in 1933 and you’ll see that during his term in office he presided over the Great Depression and two additional recessions, but a $100 investment made in US equities on his election in 1932 still climbed to $416 by 1945 when his term ended with his death.

And while Republicans are usually described as pro-business and therefore expected to be good for the economy and stock prices, the tenures of every single Democratic president resulted in positive equity returns.  You can see for yourself by clicking on presidents Truman, Kennedy, Johnson, Carter, Clinton and Obama.

In fact, only Republican presidents Hebert Hoover, Richard Nixon, and George W. Bush delivered negative returns over their terms in office, but that had more to do with the historical circumstances surrounding their presidency than their actions while in office.

Which leads me to the point we here at TAAG make quite often.

Current market prices include all information available about the current and future outlook of the country and our world.  This includes recent political polls, the likelihood of various political outcomes, and other political topics of the day.  But politics are just a part of what impacts the market.

Financial markets are much more complicated and are influenced by far more things than any one election.  Population growth, demographic changes, weather conditions, natural disasters, changing consumer tastes, and the surplus or decline of natural resources are only a few.  The ability of mankind to show resilience in meeting the challenges that life throws at us, and the inventions and breakthroughs that come from our efforts, will likely continue to deliver additional investment opportunities in areas we can’t even anticipate today.

So, as you follow the news leading up to the election and you feel yourself slipping into a dark place, consider history, take a deep breath, and remember.

Your investment portfolio doesn’t care who wins.


Interactive chart from Dimensional Fund Advisors: https://www.dimensional.com/us-en/insights/how-much-impact-does-the-president-have-on-stocks

Past performance is no guarantee of future results. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful.
Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.


  • This material is in relation to the US market and contains analysis specific to the US.
  • In US dollars. Stock returns represented by Fama/French Total US Market Research Index, provided by Ken French and available at http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html. This value-weighed US market index is constructed every month, using all issues listed on the NYSE, AMEX, or Nasdaq with available outstanding shares and valid prices for that month and the month before. Exclusions: American depositary receipts. Sources: CRSP for value-weighted US market return. Rebalancing: Monthly. Dividends: Reinvested in the paying company until the portfolio is rebalanced.
  • Growth of wealth shows the growth of a hypothetical investment of $100 in the securities in the Fama/French US Total Market Research Index. Growth of wealth for the full sample from March 4, 1929, through June 30, 2020. Growth of wealth for each presidential term starts on the election day of each president up to but not including the election day of a successor. For presidents who are not initially elected, the growth of wealth period starts from the day of inauguration up to but not including the successor’s election day.
  • Federal surplus or deficit as a percentage of gross domestic product, inflation, and unemployment data from Federal Reserve Bank of St. Louis (FRED). GDP Growth is annual real GDP Growth, using constant 2012 dollars, as provided by the US Bureau of Economic Analysis. Unemployment data not reported prior to April 1929. Federal surplus or deficit as a percentage of gross domestic product data is cumulative.
  • US Government Presidential and Congressional data obtained from the History, Art & Archives of the United States House of Representatives. US Senate data is from the Art & History records of the United States Senate.
  • For Herbert Hoover, the federal budget is calculated from 1929 to 1932. Annual real GDP growth is calculated from 1930 to 1932; GDP data not available prior to 1930.


Data presented in the Growth of Wealth chart is hypothetical and assumes reinvestment of income and no transaction costs or taxes. The chart is for illustrative purposes only and is not indicative of any investment.

The information in this document is provided in good faith without any warranty and is intended for the recipient’s background information only. It does not constitute investment advice, recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorized copying, reproducing, duplicating, or transmitting of this document are strictly prohibited. Dimensional accepts no responsibility for loss arising from the use of the information contained herein.

Eugene Fama and Ken French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP.

“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., Dimensional Ireland Limited, DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd, Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.

UNITED STATES: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.