REPUBLICANS OR DEMOCRATS – Who’re Better for The Stock Market?
Businessman checking stock market online

REPUBLICANS OR DEMOCRATS – Who’re Better for The Stock Market?

REPUBLICANS OR DEMOCRATS – Who’re Better for The Stock Market?

REPUBLICANS OR DEMOCRATS – Who’re Better for The Stock Market?

With the United States Presidential election coming up on November 3, 2020, investors are wondering who will be better for the stock market: Joe Biden or Donald Trump? 

It’s believed that Republican presidents are better for the economy and stock market than Democratic presidents. But according to an August 21 note from Liberum, a UK-based investment bank, the history shows different data. The historical stock market data points to stronger economic expansion under Democratic presidents than under Republican presidents.


According to Liberum, the average annual US GDP growth rate under a Democratic president was 3.6%, compared to 2.6% for a Republican president. And those economic gains trickled down to stock market gains as well.

The stock market, represented by the S&P 500, posted an average annual total return of 10.8% under a Democratic president, compared to just 5.6% for a Republican president, since 1947.

Liberum looked at the historical data from 1947 to 2006, which excludes both the Great Recession and the COVID-19 pandemic so that we can get a clear picture on it.

But the data is more of the same. From 1947 to 2006, the average annual return for stocks under a Democratic president was 10.5%, versus 6.1% under a Republican president.

While Republicans aim to stimulate the economy via tax cuts and deregulation, Democrats aim to stimulate consumption with redistribution policies like increased unemployment benefits, increased child credits, and food stamp support, Liberum noted.

stock market

A President Doesn’t Really Matter For Investment Returns

Presidents get plenty of the blame, and take plenty of the credit, for the performance of the stock exchange while they’re in office. A Democrat or Republican president doesn’t really affect your investment returns. As there are so many variables that influence the S&P 500’s index performance, who is president is not a significant factor.

Instead of voting for a president who you think will be best for your investments, vote for a president who you think will do the most good for the most number of people. A country begins to rot if only some people get way ahead while others are left behind.

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