A reader asks:
Which presidential candidate is more likely to cause a recession/bear market: Trump or Harris?
This question obviously came in before we had the election results but my answer would be the same regardless of who won.
Here’s a look at the max drawdown by presidential term going all the way back to Teddy Roosevelt:
Some are worse than others but it would be hard to pinpoint any kind of relationship between presidents and stock market downturns.
I’m pretty confident we will have a big correction or bear market at some point over the next four years. The president can’t stop the stock market from going down. It just happens.
As far as recessions go, here’s a look at how they stack up by administration and the long-term stock market chart:
There were obviously far more recessions in the pre-WWII era than more modern economic times.
I also had our research team look at the number of recessions started by the two political parties:
I was surprised here. There have been way more recessions started during Republican presidential terms than Democrats.
However, I don’t think this really tells us anything. Context is required here.
Was Ronald Reagan an economic maestro, or did he take over during a period of disinflation and falling interest rates?
Was George HW Bush a terrible student of finance or did his re-election fall during a slowdown in the economy?
Was Bill Clinton an economic savant, or did he happen to run the country during a period of economic nirvana, favorable demographics and the dot-com bubble?
Was George W. Bush bad at the economy or did he happen to take office coming out of a two-decade-long bull market and two of the biggest bubbles in history (stocks and housing)?
Were Obama and