It’s election season once again in the United States, and the outcome of the upcoming election will have far-reaching implications for the country’s economy and the stock market. With nearly 2,500 delegates in the ongoing primaries, incumbent Joe Biden is the presumptive nominee for the Democratic Party. Since taking office as the 46th president on Jan. 20, 2021, the stock market has seen impressive gains, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all reaching new all-time highs.
But what could a second term for Joe Biden mean for the stock market? Some potential policy changes, such as an increase in the tax on stock buybacks and corporate taxes, could impact corporate earnings and overall market performance. Additionally, economic indicators like the decline in the M2 money supply and recession probability measures suggest that a stock market plunge could be on the horizon.
However, historical data tells a different story. While short-term volatility may occur around elections, long-term investors can take comfort in the fact that the stock market has historically performed well under Democratic administrations. Over the past 94 years, the S&P 500 has weathered numerous bear markets but has ultimately produced positive total returns in all rolling 20-year periods.
Ultimately, regardless of who wins the election, history suggests that patient investors who stay the course can expect to see their investments grow over the long term. To learn more about the potential impact of a second term for Joe Biden on the stock market, check out the full article from The Motley Fool.
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