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MARKET RETURNS:
As it turns out, the President (historically) has less of an impact on the market than most people think. Instead, the real deciding factor tends to be: Congress.
In this case, it becomes apparent that the highest historical returns come from (believe it or not) a divided Congress, where one party controls the House and the other controls the Senate. In this case, a Republican president – with a divided Congress, sees the highest returns of 13.7% – while a Democrat president isn’t too far behind, at 13.6%.
Beyond that, it seems as though a fully Republican congress (like we’ll soon have) yields the second highest returns, at 13% and 12.9% annually, regardless of who’s president, and the lowest returns come from a Republican President and a Democrat congress, at just 4.9%.
In terms of investing, the strongest returns also happen for those who invest early:
* If you invested $10K on Jan 1st of an election year, you had the best outcome 60% of the time.
* If you split the $10K into $1K each month of an election year, you had the best outcome 26% of the time.
* Finally, if you waited on the sidelines to invest after the election, you only had a 13% chance of coming out on top
SECTOR PERFORMANCE:
According to past performance, it’s impossible to determine if one sector will outperform another based on who’s in office. For example, During the Trump’s 2016 presidency, “clean energy outperformed traditional energy by 43% per year. During the Biden presidency, traditional energy outperformed clean energy by 53% per year.”
In terms of WHY this happens, an investment manager of Fidelity said: “It’s exceedingly rare that a candidate will be able to deliver on exactly what they’ve proposed once they take office. If you’re making investment decisions based on such proposals, that could be a risky way of managing one’s money.”
STOCK MARKET RETURNS IN 2025:
Obviously, stocks and cryptocurrency have absolutely rallied on news of a Trump Presidency – BUT, I’d be cautious about whether those types of massive returns are sustainable.
That’s why, I’m a firm believer that it’s a lot more prudent to look at yourself, and ask: What can I do – as an individual – to improve my overall situation right now? Is that working overtime? Is it learning a new skill? Is it finding another job? Is it ensuring career stability? Is it cutting back expenses? Is it getting rid of useless overhead? Is it investing consistently?
All of these things will have a MUCH more significant impact than tax policy and the presidency.
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*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice.
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