For all the alleged shortcomings of Barack Obama’s first term as president, there should be no complaints coming from Wall Street.
Since 1833, only four presidential terms have produced bigger stock market gains than the last four years. The Dow Jones Industrial Average was up 70% during Obama’s first term. That’s pretty remarkable considering his presidency began amidst the depths of the worst recession since the Great Depression.
With Obama’s second term now under way, investors can only hope that the next four years produce even half the returns of the last four. Seventy percent gains are incredibly rare, and have never been repeated in two consecutive terms.
Here are the top five stock market returns (in the Dow Jones Industrial) by presidential term in the last 180 years:
- Franklin D. Roosevelt (1933-1937): 134%
- Calvin Coolidge (1925-1929): 107%
- Abraham Lincoln (1861-1865): 98%
- Bill Clinton (1993-1997): 74%
- Barack Obama (2009-2013): 70%
Of those first four presidents, Bill Clinton boasted the biggest gains in his second term. From 1997-2001, the Dow was up 58%.
Stocks fell in FDR’s second term. Lincoln’s second term produced only 7.5% returns. Coolidge only had one full term after taking over for Warren G. Harding upon Harding’s sudden death in 1923.
It’s difficult to have eight years of sustained prosperity on Wall Street.
So while the last four years have been very good for stocks, don’t expect similar returns between now and 2017.
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