No. of Recommendations: 3
History shows that second term Democrat presidents have been among the best terms for economic growth. My spreadsheet says after inflation (the numbers are messy before 1947), we have the following economic growths:

Woodrow Wilson II - -8%
FDR II - 18.4%
Harry Truman II - 21.1%
LBJ II - 22.5%
Clinton II - 15.4%

Woodrow Wilson II was the post WWI depression, so I would tend to count it as an outlier. World wars have severe recessions during re-integrations, so I think we know what was going on there. Harry Truman is kind of cheating because it is actually FDR V and not a second term. The four above after Wilson are 4 of the top ten, so overall second term Democrat is a good portent assuming that we know we are not re-integrating from a world war.

I thought I would see how well this carried over to the stock market since republicans tend to be associated with P/E increases.

Looking at the dow, I saw the following: (looking at Jan 20 opening)

FDR II 1937 184.1 1941 129.75 -29.52%
Truman II 1949 181.12 1953 286.97 58.44%
LBJ 1965 896.27 1969 935.54 4.38%
Bill Clinton 1997 6833.1 2001 10581.9 54.86%

As a side note, FDR II was terrible, but FDR 1 was actually a triple from 61.02 on Jan 20 1933

Overall the results were 22% growth on average, which is slightly better than the overall average of 20% per four years (68 to 13100 from 1900 to 2013), but is much worse than the growth rate, which unlike this stock return, is inflation-adjusted.

Summary, economic growth is significantly better than average in a democrat second presidential term, but it is hit or miss whether this actually helps you in the stock market.
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