Presidents and Portfolios

Cade here! I just wanted to say thank you for being a reader as we just crossed 5,000 subs! It’s crazy to think that this email list is almost larger than the town where I grew up.

Yes, emails have been a little inconsistent lately, but I have no plans of stopping. As always, the goal of Chump Change is to help you get smarter about money, and have a laugh along the way.

It’s been a fun ride, so I hope you hang around and continue to share your favorite pieces with friends and family 🤝 

I’ll get off my soapbox now. Onto today’s piece!

Quote

“Ethics in business means don’t sell anything you wouldn’t buy yourself.” - Naval

Presidents and Portfolios

It’s an election year folks, and the political scene is hotter than ever.

A debate that was hard to watch, an assignation attempt, a president who struggles to walk, and a nominee who wasn’t “really” nominated…what’s next?

While no one knows the answer to that, here is the answer to how the next president might influence your portfolio.

Here is what the market has done under both Republican and Democratic leadership. 👇️ 

Republican Returns

Taking a look at the average annual S&P 500 market return under a Republican president shows us the following (1933-2002):

Democratic President

Swapping over to the blue side, the numbers are actually quite similar with the Democrats sneaking out an advantage.

Overall Returns

So which is better? It depends on how you look at the data.

Based on performance over the 4-year presidential term Republicans win with a median annual growth rate of 10.2% vs the Democratic 9.3%. But don’t raise the Trump flag just yet….

Biden is putting together a complete sentence, ”What about individual year returns?” Let’s see…

Breaking it down by individual year the Democrats win with a median annual growth rate of 12.9% vs the Republican 9.9%. The main hit to the Republican returns was the 2008 housing crash when the S&P 500 finished the year down 38%. Mr. George W. Bush was president at the time.

As with most stock market scenarios, you can make the data say whatever you want.

Conclusion

The interesting part from this information is that the highest returns have come from a divided Congress. There are many theories to why this is, but the best guess is that markets don’t like uncertainty. Having a divided house keeps policies in check and avoids any drastic changes that could significantly impact the market.

Overall I’ll let the legend Mr. Warren Buffett close this one out.

You heard the old man. Politics don’t have a place in your portfolio. Red or Blue, this party isn’t stopping. ~ Cade

Chump Change Picks

The Recent Political Vibe Shift - Politics are a hot topic that I generally try to avoid. Jack Raines though wrote an interesting piece on the shift away from “woke” that seems to be taking place. Blue or red, would recommend giving it a read as it offers a unique perspective.

Switch To a Lower-Paying Job? - Short clip from The Money Guy Show discussing if you should switch to a lower paying job, and what should be considered when shifting careers later in life.

12 Money Tools Free PDF - After taking a vote on Twitter it seems people favor having a PDF deliverable. So, I went ahead and converted the 12 Money Tools three day email series into a free PDF. Now you can have it forever.

Best Memes

Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email don’t hesitate to send me a reply.