U.S. President Joe Biden meets with President-elect Donald Trump in the Oval Office at the White House in Washington, U.S., November 13, 2024.
Kevin Lamarque | Reuters
Investors wondering if the presidential election may usher in a bad or good time for the stock market won’t find any easy answers looking at the past.
One year after President Joe Biden won the presidency in 2020, the S&P 500 was up more than 42%, according to data provided to CNBC by Morningstar Direct. (Morningstar analyzed the returns in the six and 12 months following Election Day for those 24 U.S. presidential elections.)
The index fell around 6% in the 12 months after Jimmy Carter defeated former Republican President Gerald Ford. It dropped a similar amount in the year following Dwight Eisenhower’s second win.
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Meanwhile, a year after Ronald Reagan was first elected, the S&P 500 was up 0.6%. Twelve months after Reagan’s reelection, the index had swelled around 19%.
When you look at how stocks fare after presidential elections, “there’s no obvious and discernable pattern,” said Jude Boudreaux, a certified financial planner who is a partner with The Planning Center in New Orleans.
“Election years aren’t that different from a typical year in the stock market,” said Boudreaux, a member of the CNBC FA Council.
In other words, the market’s movements are just as unpredictable.
As a result, Boudreaux said he isn’t recommending any broad changes for clients based on President-elect Donald Trump’s win.
Dan Kemp, global chief investment officer for Morningstar Investment Management, had similar advice to investors.
“When investors face uncertainty, they might seek narratives that predict the future and then change their portfolios accordingly,” Kemp said in a statement.
But, he said, “the most important thing an investor can do is stick to their plan.”