Separating Politics from Investment Decisions: A Reminder for Election Years

April 29, 2024

It's an election year, so I need to remind you of something.

The above chart shows that an investor's perception of how the nation is doing economically can be shaped by whether or not their chosen candidate is in office.

JP Morgan Asset Management explains,

The results show that Republicans often feel better about the economy under a Republican president, while similarly, Democrats often feel better about the economy under a Democratic president. Yet, average annual returns on the S&P 500 during the Obama administration of 16.3% and during the Trump administration of 16.0% were almost identical and higher than the average return over the last 30 years. Also, GDP growth is typically not impacted by who is in office.1

May this serve as another reminder to be cautious when basing investment decisions on which party has presidential power.

One wise man said, "The investor's chief problem - and even his worst enemy - is likely to be himself."

One might add...and also his politics.

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Sources:

  1. Guide to the Markets – U.S. Data are as of March 31, 2024. Accessed online: https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/