The S&P 500 performed exceptionally well during Donald Trump’s last presidency, but the future looks bright for investors regardless of who wins the election. With the 2024 presidential election just six months away, neither political party has officially selected a candidate, but Donald Trump and Joe Biden have secured enough delegates to win the nominations.
History suggests that the S&P 500 could soar if Donald Trump is elected president in November. However, experts caution against basing investment decisions solely on the political party in power. Analysts at Goldman Sachs emphasize that equity prices will continue to be driven by macro fundamentals, rather than political affiliations.
During Trump’s last presidency, the S&P 500 saw an annual return of 14.1%, outperforming the 8.7% return under Joe Biden. Interestingly, the index performed better under Trump than any other Republican president in history, with only Democrat Bill Clinton overseeing a greater annualized return.
While past performance can provide insights, it is not a guarantee of future results. The macroeconomic environment today is vastly different from when Trump was last president, with factors like inflation and interest rates playing a significant role in shaping market outcomes.
Ultimately, investors should focus on long-term trends rather than short-term political shifts. Regardless of who wins the election, the S&P 500 is expected to revert to its historical average return of around 10% annually over extended periods. So, while the stock market may have thrived under Trump’s presidency, investors should approach the upcoming election with a broader perspective on market dynamics.
