Election Day is Tuesday, and millions of Americans have already cast their vote in early voting for President.

Political Bias: The Million-Dollar Investment Mistake

On this segment, we have repeatedly told you this year that mixing your politics with your investment strategy can be disastrous. We are going to use this final segment before the election is over to drive home that point again.

This is a simple chart from Invesco. It shows the growth of a $10,000 investment in the Dow Jones Industrial Average, going all the way back to 1896. The dark blue line represents growth if you were only invested during Democratic Presidential administrations. The light blue line represents the growth if you were only invested during Republican Presidential administrations. The gray line represents the growth of your investment if you were in the Dow all the time. You would have about $10 million if you rode out all administrations. You would have less than a tenth of that if you only invested when the President was a member of your favorite party.

Presidential Performance: S&P 500 vs GDP Growth

Now, let’s take a look at a more specific chart.

This shows the annualized performance of the S&P 500 during every Presidential administration since Eisenhower. It also plots that number on a graph and compares it to the annualized GDP growth during those same administrations.

You can see the stock market was negative under only two presidents, George W. Bush and Richard Nixon, but GDP grew under every President. This shows that the economy has gone through cycles, as it always does, but has grown under all administrations. The stock market has grown at an annualized rate of 10% or higher during 11 of the past 13 administrations.

Historical Context: Market Challenges and Economic Resilience

It’s worth pointing out what was happening during the two administrations that it didn’t. George W. Bush was at the helm during 9/11 and the Great Financial Crisis. Richard Nixon was in office during the Vietnam War, and a period of stagflation, when inflation and unemployment were high. Yet, GDP still grew.

And it’s growing now. The Commerce Department released a report this week that announced the U.S. economy grew at a 2.8% annualized rate in the 3rd quarter of 2024. Consumer spending was up 3.7%, which represents about 70% of economic activity.

Your Vote and Your Wealth: Making Informed Decisions 

We can certainly have our political opinions about who will do the best job at keeping the economic engine going, and policy does matter in that regard.
There is also more to consider when you cast your ballot than just the economy and the stock market. Your vote matters for the future direction of our country.

But, just remember when you’ve cast your vote, your financial independence does not depend on who is in the White House. It depends on the decisions you make in your house.

The opinions voiced in this video and blog are for general information only and are not intended to provide specific advice or recommendations for any individual.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance. Independent Advisor Alliance and GenWealth Financial Advisors are separate entities from LPL Financial.