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IRA Financial Blog

Upcoming Presidential Election and its Effects on the Economy and Markets

Market Minute

In the first episode of Market Minute, Benchmark Financial’s Dan Segal discusses the upcoming 2020 election and the impact it will have on both the economy and the markets, depending on which party gets the nod.

Introducing Market Minute, a new podcast series, dedicated to the current goings on in the financial world. In today’s episode, Dan Segal, from Benchmark Financial, talks about the 2020 election. We now know that Joe Biden will challenge President Trump. We also know Senator Biden’s plans if he wins the election. A democratic victory will lead to sweeping changes that will affect all Americans.


The overwhelming consensus is that Republicans are pro-growth and better for the economy. However, is that true? Polls show the Democratic nomination leading in most polls, even after the RNC, though the gap is much smaller now. Senator Clinton led all the polls right up until election day and we know what happened there. In fact, in 2016, a Clinton victory was being looked as a better option for the economy, since the markets don’t like change. Of course, we all saw the markets soar under Trump. That is, until COVID-19 hit our shores.

We cannot make assumptions based on what we think will happen if Biden and Harris win the election. But, we can look at the history books. Who is better for your wallets, Republicans or Democrats? Surprisingly, Democratic administrations have outperformed the Republicans in stock market returns. In fact, the two highest cumulative returns for eight-year presidents are both Democrats – Barrack Obama and Bill Clinton.

Of course, pass performance is not an indicator of future returns. Also, we need to consider Congress. A split Congress will create a log jam, no matter who wins the presidency. However, when there are checks and balances, the markets do better than when held by one party. We know Biden will look to raise taxes and that may lead to a tough economy. However, Clinton did the same thing and the markets performed better than any other two-term president.

We don’t know what we don’t know. We need to be patient and wait for the election to see what shakes out. Let’s deal with what’s in front of our faces for now, and wait until November to worry about the election results!

Learn More

You can subscribe to the Market Minute podcast on SoundCloud or find it on your preferred services. We want to thank Mr. Segal for the insightful information he provides. Of course, we want to thank you for listening as well. Stay tuned for the next episode!

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