Stock Market: Risk is far more important than the occupant of the White House

[TalkRadio]

Plenty of ink has been spilled by pundits, economists, portfolio managers, strategists and the financial media about what President Donald Trump’s economic plans, cabinet selections, trade talk, fiscal policy and other ideas will mean for the markets. Some see the Trump rally since early November as a sign that investors believe his policies will be market-friendly for the next four years. Others see the surge -- part of the eight-year long bull market -- as little more than a sugar high and predict Trump is likely to crash the markets through policy mistakes or a poorly worded tweet.

Yet it would be pure speculation at this point to forecast whether Trump will cause a boom or a bust in the stock market. Either is always a possibility, but in the stock market, risk is typically much easier to predict than returns. Returns are promised to no one, but risk is ever-present.

Every president saw severe corrections or bear markets on their watch. The average loss over all four-year terms was 30 percent. The average loss under a Republican administration was 37 percent while the average loss under the Democrats was 24 percent. But these differences don’t really tell you much about the two parties. The stock market does not care about Republicans or Democrats.

For example, if you look at the stock market performance under both Republicans and Democrats going back to 1853, two full presidential terms before Lincoln took office, the performance is fairly similar. Total returns under Democrats were 1,340 percent, the total returns under Republicans were 1,270 percent.

https://www.bloomberg.com/view/arti...-doesn-t-matter-that-much-to-the-stock-market

 

[LiamAnthony]

https://www.computerhope.com/issues/ch001328.htm

 

[Hypoxia]

For example, if you look at the stock market performance under both Republicans and Democrats going back to 1853, two full presidential terms before Lincoln took office, the performance is fairly similar. Total returns under Democrats were 1,340 percent, the total returns under Republicans were 1,270 percent.

https://www.bloomberg.com/view/arti...-doesn-t-matter-that-much-to-the-stock-market

Larf larf larf.

Larf #1: There was no Republican party in 1853.
Larf #2: Parties now aren't what they were many decades ago.
Larf #3: POTUS party matters less than control of WH and Congress.

I've seen data back to 1900. Markets do best with (in order):

#1 (R) president, (D) congress
#2 (D) president, (R) congress
#3 (D) president, (D) congress
#4 (R) president, (R) congress

The current situation is a worst-case scenario for markets over Tromp's term. Gups will get what they deserve, long-run.