Which President Is Better for Your Portfolio? The Stock Market Data Tells a Surprising Story

When election season rolls around, both political camps inevitably claim they’re better for Wall Street. But what does the actual data reveal? Let’s dig into the numbers—and you might be shocked by what they show.

The S&P 500’s Political Paradox

The S&P 500 tells a fascinating tale when examined through the lens of presidential administrations. Since March 1957, this benchmark index of 500 large-cap U.S. companies has grown a staggering 11,830%, compounding at 7.4% annually. But here’s where it gets interesting: the performance varies dramatically depending on who occupies the Oval Office.

When you break down the stock market performance by president, the results create what economists call “the paradox of political performance.” Democratic presidents saw an average compound annual growth rate (CAGR) of 9.8% in the S&P 500, while Republican administrations averaged just 6%. On paper, that’s a clear Democratic advantage.

Except it’s not.

The Median vs. Mean Trap

This is where the devil lives in the details. When you look at the median CAGR instead of the average, the picture flips entirely. Republican presidencies achieved a median return of 10.2%, while Democratic ones came in at 8.9%. Mathematically, both parties can legitimately claim the stock market performs better under their watch—which reveals a fundamental truth: statistics can be weaponized to support almost any narrative.

Year-by-year annual returns tell yet another story. The S&P 500 posted an average annual growth rate (AAGR) of 11.4% during Democratic administrations versus 7% during Republican ones. But AAGR is a flawed metric because it ignores compounding effects, which means it can severely distort performance reality.

Why Presidential Politics Aren’t the Real Market Driver

Here’s the inconvenient truth that election campaigns won’t tell you: the president doesn’t control the stock market. Period.

While a sitting president does influence fiscal policy, Congress writes the actual budget. More critically, government spending represents just one variable in a complex ecosystem affecting equity valuations. Consider the dot-com bubble (2000), the Great Recession (2008), and the COVID-19 crash (2020)—none of these were caused by any president, yet all three triggered seismic stock market declines.

Stock prices ultimately track business fundamentals: revenue growth, earnings, and profitability. These metrics are influenced—but not determined—by fiscal policy. Economic cycles, technological disruption, geopolitical events, and corporate innovation matter far more than which party controls Washington.

What History Actually Teaches Long-Term Investors

Here’s what matters: over the past three decades, assuming dividend reinvestment, the S&P 500 has delivered a 1,920% return, compounding at 10.5% annually. That timespan encompasses multiple political administrations, diverse economic environments, recessions, recoveries, and market cycles.

The lesson? Regardless of which candidate wins the next election, patient investors should expect roughly similar long-term returns. The S&P 500 doesn’t deliver 10.5% every single year—volatility is inherent to equity markets. Rather, this represents the average annual return over extended holding periods.

The best predictor of future stock market performance isn’t the presidential election result—it’s time in the market and diversification. Market timing based on political preferences is a losing strategy. The real risk isn’t who’s president; it’s abandoning your investment thesis during cycles of short-term volatility.

So when candidates claim they’re the true pro-market choice this election cycle, remember: their speeches won’t determine your portfolio returns. Your discipline, diversification, and time horizon will.