How Do Democrat And Republican Governments Perform In Stock Market?

Luckily, numbers don't lie and we've got the data to help you understand which political party fairs better in performance.

During any Presidential election year there’s always discussion about which party is better for the economy, the stock market is an integral part of this discussion. Typically, the country is split dependent upon region, demographic, or political affiliation. Luckily, numbers don’t lie and we’ve got the data to help you understand which political party fairs better in performance.

There’s a phenomenal interactive tool that sums things up quite nicely. It shows the hypothetical growth of $1 invested in the S&P 500, Jan. 1925 – Jul. 2023. The tool begins with our 30th President, Calvin Coolidge (Republican), and brings us to our current President, Joe Biden (Democrat).

Throughout history, Democrat Presidents (15.2%) have produced better overall returns than Republican Presidents (9%.)The difference between these average returns appears largely due to economic and market factors outside any president’s control. You will notice an upward-trending nature of the stock market since the Great Depression. This is why financial advisors always say to think long-term when investing; it’s evident that it pays off.

However, you’ve got to be able to weather the downturns and not lose sight of the long-term focus. If short-term is your goal, there might be better places for your money than investing in the stock market because you might be unlucky. There’s always a chance you can lose what you put in.

That last point is what we all should focus our attention on. The stock market has consistently gone up since the Great Depression. Yes, there are downturns here and there, but overall, it has still been a great place to keep your money over time. If there’s one takeaway everyone needs to remember, it’s this: Your long-term investment strategy should not be influenced by short-term political changes.

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Jasper Smith is the founder of The #BuildWealth Movement®. He’s worked in the financial services industry for over 15 years and holds a life insurance license, multiple securities licenses, and the Certified Retirement Counselor (CRC®) designation.