Assessing U.S. Presidencies Through Stock Market Performance 📈
One common way to evaluate a presidency is by looking at how the American stock market performed during their time in office. Presidents themselves often use this metric as a gauge of their success, with the Biden administration already focusing on the market’s performance leading up to the next election.
Historically, a strong showing in major indices like the S&P 500 and Dow Jones Industrial Average in the months before an election has often resulted in a victory for the incumbent. Given this trend, Finbold decided to analyze the returns of a $1,000 investment in the S&P 500 made at the start of each 21st-century presidency up to May 2024.
George W. Bush (January 20, 2001 – January 20, 2009) 🌐
- The S&P 500 was at 1,320 points when Bush took office in 2001 during the Dot-com crash.
- While there was a recovery, the index was below its 2001 levels at the start of 2005, standing at 1,168.
- A $1,000 investment made at the start of Bush’s first term would have fallen to $884.85.
- Investments made in 2001 or 2005 did not yield growth due to crises during Bush’s presidency.
- By the end of his term, the S&P 500 was around 900 points, resulting in further losses for investors.
Barack Obama (January 20, 2009 – January 20, 2017) 📈
- Under Obama, a $1,000 investment in the S&P 500 in January 2009 would have seen substantial growth.
- By the end of his first term, the investment would have been worth $1,655.56, and $2,533.33 by the end of his second term.
- Investing in 2013 would have yielded returns of $1,530.20 by 2017.
- By 2024, $1,000 invested in 2009 would have grown to $5,853.16, while 2013 investments would be at $3,535.46.
Donald Trump (January 20, 2017 – January 20, 2021) 📉
- Despite challenges during Trump’s presidency, the stock market saw significant growth overall.
- A $1,000 investment in January 2017 would have grown to $1,622.81 by 2020 and $2,310.46 by 2024.
- Although the market dipped in early 2020, it recovered and erased losses by the end of Trump’s term.
Joe Biden (Incumbent) 🌟
- The complete story of Biden’s impact on the stock market is yet to unfold as the next election approaches.
- A $1,000 investment in the S&P 500 in January 2021 would have grown to $1,423.74 by May 2024.
- With the index’s rise under the current administration, the market’s performance has been a focal point for investors.
Hot Take: Analyzing Presidents Through Stock Market Performance 💡
Investors often look to the stock market as a gauge of a president’s performance, with historical trends showing a correlation between market success and election outcomes. By assessing the returns of a $1,000 investment in the S&P 500 under different presidencies, one can gain insights into how each administration impacted the financial markets. As the Biden administration continues, monitoring the market’s performance remains a key aspect of evaluating his presidency.
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