What is the direct correlation between the stock market highs and Trump's presidency?

The DJIA and S&P 500 reached record highs yet again today. I want to understand how direct the impact is of Trump's presidency on these ever increasing indices. Every news outlet seems to be pinning Trump as the reason for such highs. Are there other factors at play here? How much of this economic growth is really caused by Trump?

Investing, Stocks
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March 2017

I caution against giving any president credit and blame for how the stock market behaves. Markets move for a variety of reasons including political developments and economic policy proposals. Financial news and news media in general love to point to the “reason” of events. In this case, credit for the rally is attributed to the election of President Trump. It’s worth noting that markets were hitting records before the election, even when many pundits were claiming Clinton would be the winner of the election.

Consider the way the markets performed when President Obama took office. The markets were in free fall and didn’t bottom until March of 2009. Was the decline that continued when he took office until two months later attributable to him, or were larger financial and economic forces at play? Similarly, the Dow Jones Industrial Index increased 125% during the Obama administration. Should President Obama get credit for that? My feeling is that all presidents receive far too much credit and blame for how the stock markets perform than they deserve.

For the most part, crediting or blaming presidents for stock market performance is just noise. I wrote an article called Investment Decisions And Tuning Out The Noise. It provides more examples of what investors should ignore. I hope you find it helpful.

Please note that this should not be considered investment advice and is only educational in nature. Be sure to consult your own investment, tax, or legal professional for help with your specific situation.

Best of luck!

David N. Waldrop, CFP®

March 2017
March 2017
March 2017
March 2017