The infographic above is a summary of Frobes article We Looked At How The Stock Market Performed Under Every U.S. President Since Truman — And The Results Will Surprise You from Sergei Klebnikov and Halah Touryalai that looks at the performance of stock markets under different US presidents. The article gives a further breakdown of S&P’s performance year on year under each president’s regime along with few highlights during their term. We have intentionally left out Trump from the infographic above as his term is still not completed at the time of writing the article.
Handle with care…
Though the article quotes annualized real stock market returns from 1952 through June 2020 to be 10.6% for Democrats and 4.8% for Republicans, it is important to note that looking numbers at high-level like this does not give a full picture. Some things to think about at a high level:
- Though the overall stock market return under Democrats might be higher, this is mostly driven by two recent regimes of Bill Clinton and Barack Obama which drive the overall average up. A generic conclusion that S&P perform better under one party should be well-thought.
- Two of the highest Debt to GDP ratio are also under Democrats 104% under Barack Obama and 71% under Harry Truman. Having a higher S&P return is one side of the story, what are the implications of borrowing more?
- Most importantly the circumstances and the state of affairs of the world under different presidency regimes cannot be compared that simply. George W. Bush achieved a -40% S&P return, but the tenure also saw the turbulence of 9/11 attack which is unprecedented.
Having said all the above, the infographic provides a good starting point to get a feel for high-level picture and ask and investigate deeper questions.
About the infographic
The infographic style above is extremely powerful in communicating number of things in a concise manner:
- Colour: captures the party
- Size of the box: captures the length of president’s regime
- Ruler: captures the time period of the regime
- Bars and other metrices of interest inside each box
- Pictures of president to quickly grab the attention who we are talking about
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