The market’s recent rise has had plenty of nay-sayers, many of whom find it difficult to disentangle their investment opinions from their political views. But markets may be driven less by politics than folks often assume. The chart on the left looks at the average annual return on the S&P 500 stock index during the time in office for every American president from Calvin Coolidge to Barack Obama.
Personally, I find it a little embarrassing that stocks had their worst years under three different Republican administrations—Hoover, Nixon and George W. Bush. But, if we can ignore those unfortunate disasters, at least for a moment, I invite you to consider the other presidents. Their policies ranged from liberal to conservative and the stock market did about the same no matter which direction the president faced. For me, the message is clear: while politics play an important role in our lives, they are unrealiable as a market timing signal.