Are you worried about your portfolio under a new administration? Even if you voted for the current party in office, you may be wondering what lies ahead for the stock market, interest rates, and ultimately how your portfolio may be impacted. 

I thought it might be helpful to step back and reflect on the performance of the S&P 500 during the last 7 presidential terms, including Trump’s first term in office. A change in administration doesn’t mean the rules have changed with financial markets. The markets move in part based on quantitative indicators, but also based on the collective (and often irrational) emotions of investors. 

You may be wondering to what extent presidential policies and initiatives lead to either a positive or negative market. It is hard to measure, but there is no question that policies do influence market behavior and outcomes. For example, the Tax Reform Act of 1986 ushered in significant changes to our tax laws and lowered tax rates. Included in that Reagan era initiative was the end of large tax write-offs formerly permitted for rental real estate ownership. That one change in tax law triggered a collapse of the 1980s era savings and loan industry, and it has been linked to the Black Friday market collapse on October 19, 1987. 

However, during the Clinton era, technology was the big catalyst (not presidential policies) for the market boom during that period. In fact, it was so good that we were living in a technology bubble that didn’t fully burst until after George W. took office. 

Unfortunately, the Bush administration not only suffered from the misfortunes of the dot-com bubble burst (2000-2002), but also three scandals: Enron (2001), WorldCom (2002), and the Martha Stewart insider trading scandal (2003). In addition, there was a rollback of financial regulations and loosening of credit markets. These changes led to the subprime mortgage crisis, which ultimately sparked the worldwide financial collapse in 2007 and 2008. Clearly in the George W. Bush era it was a giant mix of events that moved the markets, but only part of it was related to policies. 

Here is a brief synopsis of how the market performed in each era:

1. Joe Biden (2021 – 2025)
For 3 of the 4 years, the S&P 500 had a steady increase, for the most part reflecting economic recovery post-pandemic. However, 2022 was bad for both stocks and bonds. The rapid rise in interest rates and inflation were key issues. Many people experienced double digit losses in 2022, resulting in 4-year average returns being a bit lackluster for most investors.

2. Donald Trump (2017 – 2021)
The market saw significant growth, especially in the first three years, before experiencing volatility in 2020 due to the COVID-19 pandemic. The big negative during this period was the government shut down at the end of 2018. However, the market quickly rebounded in 2019.

3. Barack Obama (2009 – 2017)
The S&P 500 had a strong recovery following the 2008 financial crisis, with overall stable and consistent growth throughout most of his terms. One memorable year of poor performance was 2011, which was marred by a debt crisis in Europe, uninspiring economic news, and a downgrade of the U.S. credit rating. 

4. George W. Bush (2001 – 2009)
As previously mentioned, the market experienced multiple volatile periods during the early 2000s and then again in the 2007-2008 financial crisis. 

5. Bill Clinton (1993 – 2001)
The S&P 500 saw substantial growth, benefiting from the tech boom of the late 1990s.

6. George H.W. Bush (1989 – 1993)
The market had moderate growth, with some volatility due to the early 1990s recession. 

7. Ronald Reagan (1981 – 1989)
Overall, the S&P 500 experienced significant growth, particularly in the latter part of his presidency. Microsoft went public in 1986, marking the beginning of the computer technology era.

The good news is that as a nation, we do sometimes learn from our mistakes. After most major events, preventative measures are typically taken by Congress, the Federal Reserve, and regulators to improve policies and market responses. 

Also, your portfolio here at AFG has been designed from the start to anticipate down markets. We know that markets do not move in a straight line, and that there will be triggers and emotional market responses no matter who is occupying the oval office. Our systems are designed to respond to those events so that you can ride out the difficult periods, if not benefit from them. 

We always want to hear from you, whether you have questions on your portfolio or simply want to meet with your advisor. Please reach out to us, as we are here to serve you and want to make sure you are comfortable with how your portfolio is positioned, no matter how the markets behave.

If you’re interested in looking deeper into the numbers, you may be interested in this S&P 500 Historical Annual Returns chart from Macrotrends.

Kristina Bolhouse, CPA/PFS, CFP®

President/Shareholder

© 2025 Kristina Bolhouse and The Arkansas Financial Group, Inc., All rights reserved.

The Arkansas Financial Group, Inc. is a Fee-Only Financial Planning Firm located in Little Rock, AR serving clients in Arkansas and throughout the country.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by The Arkansas Financial Group, Inc. [“AFG]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from AFG. AFG is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the AFG’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.arfinancial.com.

Please Remember: If you are a AFG client, please contact AFG, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.