
The presidential election is just around the corner. But if earning big money in the stock market is your focus, which party should you pull for?
Recently, Janus Henderson Investors analyzed stock market returns based on the performance of the S&P 500 index from 1937 through June 2024. (It’s worth noting that the actual index itself wasn’t created until 1957 so some of these returns are likely extrapolated.)
Based on its analysis, here is the average historical performance of the stock market under four political-party scenarios.
1. Republican president and Republican-controlled Congress

The average annual return of the S&P 500 during this type of government leadership: 16.13%
Republicans last controlled the White House, the Senate and the House during President Donald Trump’s first two years in office. In those years, the largest tax reform law since the 1980s was enacted.
Prior to Trump’s presidency, the last time Republicans controlled the full government was in the years 2003-2007 under President George W. Bush.
2. Democratic president and divided or Republican-controlled Congress

The average annual return of the S&P 500 during this type of government leadership: 15.93%
In this scenario, a Democrat is in the White House, but the Senate and/or House are controlled by Republicans. This has been the case throughout President Joe Biden’s term.
Prior to that, it was also the case during the last six years of President Barack Obama’s stint in the Oval Office, which ended in early 2017.
3. Democratic president and Democrat-controlled Congress

The average annual return of the S&P 500 during this type of government leadership: 12.06%
Democrats last controlled the White House, Senate and House during the first two years of the Obama presidency. In that era, the landmark Patient Protection and Affordable Care Act became law, changing how millions of people obtain their health insurance. The Dodd-Frank Wall Street Reform and Consumer Protection Act also was enacted then.
Prior to the Obama administration, the last time Democrats fully controlled the executive and legislative branches of government was during the first two years of President Bill Clinton’s first term, 1993-1995.
4. Republican president and divided or Democrat-controlled Congress

The average annual return of the S&P 500 during this type of government leadership: 9.37%
In this scenario, a Republican is in the White House, but the Senate and/or House are controlled by Democrats. The last two years of the Trump presidency — which ended in early 2021 — unfolded under these circumstances.
Prior to that, the situation last existed during the first two (2001-2003) and last two (2007-2009) years of George W. Bush’s presidency.