During the presidential campaign we heard the Trump supporters declare that your Savings Plan at work (401(k), 403(b) , 457, ?) would be negatively impacted if Biden became president. So we decided to test the theory and we found some interesting FACTUAL results.
During the Trump administration the Dow-Jones, the S & P 500 and the NASDAQ returned the following annual averages:
DOW-JONES: +11.6%/YEAR
S & P 500: + 9%/YEAR
NASDAQ: + 25%/YEAR
Compare these results against the Biden results. We measured the time from the actual election date (when we knew Biden was the winner) and from the actual inauguration date (when Biden took the reins of government).
(1) results from the election date—November 4, 2020 ( 159 days )
DOW-JONES: +22.5% IF PROJECTED ANNUALLY: +52%/YEAR
S & P 500: +20.1% IF PROJECTED ANNUALLY: +46%/YEAR
NASDAQ: + 20.7% IF PROJECTED ANNUALLY: +48%/YEAR
(2) results from the inauguration date–January 20, 2021 ( 83 days )
DOW-JONES: + 8% IF PROJECTED ANNUALLY: +35%/YEAR
S & P 500: +7% IF PROJECTED ANNUALLY: + 31%/YEAR
NASDAQ: +4% IF PROJECTED ANNUALLY: +18%/YEAR
Remember:
- Trump’s returns were achieved after inheriting a reasonably healthy economy under the Obama reign;
- Trump’s gains were achieved during 3 non-COVID affected years; and
- Biden’s returns-to-date were all achieved during the midst of the COVID impact as vaccines were being distributed.
The NASDAQ return to-date for Biden is the only slightly lower number than the Trump results because COVID shutdowns obviously hurt small businesses much more than larger firms. Otherwise, it is clear that the threat to your Savings Plans was not only not realized–it was actually aided by the Biden election. Add two more comments: (1) the US economy is expected to grow at a record pace for the rest of 2021–virtually guaranteeing solid stock market returns for the year; and (2) just this week the Dow-Jones AND the S & P 500 reached record levels. Judge for yourself. Did the election of Joe Biden help or harm your 401(k)?
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