August 9th 2024.
Every time a Presidential election rolls around, the debate about which political party is better for the economy resurfaces. One key aspect of this discussion is the performance of the stock market. As expected, opinions are divided based on where individuals live, their demographics, and their political affiliations. Fortunately, we have access to data that doesn't lie, and it can help shed light on which party has a stronger track record in terms of economic performance.
There is a fantastic interactive tool that neatly summarizes this information. It presents the hypothetical growth of $1 invested in the S&P 500 from January 1925 to July 2023. The journey begins with the 30th President, Calvin Coolidge, and takes us all the way to our current leader, Joe Biden.
Looking back through history, it's clear that Democrat Presidents have generally yielded better overall returns than Republican Presidents. Of course, there are various factors that contribute to this difference, many of which are beyond the control of any President. When examining the upward trend of the stock market since the Great Depression, it becomes evident why financial advisors always stress the importance of thinking long-term when it comes to investing. The evidence speaks for itself – patience and a focus on the big picture can reap significant rewards.
However, it's essential to be able to ride out the inevitable downturns and keep your long-term goals in mind. If your objective is short-term gains, investing in the stock market may not be the ideal option, as luck may not always be on your side. There's always a chance that you could lose the money you put in.
This brings us to a crucial point that deserves our attention. Despite occasional dips, the stock market has consistently shown an upward trend since the Great Depression. While it's natural to feel concerned during turbulent times, it's essential to remember that over time, the market has proven to be a sound place to invest your money. If there's one key takeaway from all of this, it's that short-term political changes should not influence your long-term investment strategy.
Meet Jasper Smith, the brains behind The #BuildWealth Movement®. With over 15 years of experience in the financial services industry, he holds a life insurance license, multiple securities licenses, and the esteemed Certified Retirement Counselor designation.
In related news, Moderna's stock experienced only a minimal decrease after their new COVID vaccine exceeded initial projections.
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