Have you ever wondered how the White House affects your ability to build wealth? Recent presidents like Donald Trump and Joe Biden have taken vastly different approaches, so it's natural to be curious.
We'll explore how these policies might influence the overall stock market, specific industries, and, ultimately, the decisions you make about your investments.
Steal this billionaire wealth-building technique
The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.
A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.
If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)
How did stocks perform under Donald Trump?
The stock market under the Trump administration saw some impressive gains. Stocks reached new heights with a surge of 63% in the S&P; 500 index over his tenure.Β
For reference, the S&P; 500 gained 27% under Jimmy Carter and 47.5% under George H.W. Bush (both one-term presidents). Under Barack Obamaβs two terms, the S&P; 500 jumped 175.9%.
In contrast, the advent of the Biden presidency introduced a phase characterized by nuanced and mixed performance, where market dynamics shifted with policy changes and some economic challenges.
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How have stocks performed under Joe Biden?
Biden's far-reaching policies in infrastructure, clean energy, and health care promise to invigorate specific sectors such as renewable energy and technology with newfound resilience.
Under the Biden administration, the benchmark S&P; 500 generated impressive returns of 27% in 2021 and 24% in 2023. The S&P; 500 fell 19% in 2022.
Investors need to adopt a strategic approach to portfolio management to navigate the market changes that result from changing political administrations and ongoing economic dynamics.
What to consider if Joe Biden is reelected
In the hypothetical scenario of Biden securing a second term, investors should expect the status quo in several policy areas, such as climate change, infrastructure, and renewable energy.
However, investors must remain aware of potential shifts in regulatory frameworks and tax policies that could potentially alter market dynamics.Β
Diversification and a focus on companies exhibiting resilient business models emerge as crucial strategies to mitigate risks associated with policy changes.
Get a free stock valued between $5 to $200
Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.
Robinhood offers a method of investing called βfractional shares.β On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.
Letβs say you want to invest $250, as an example.
With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.1
Even better news? Add a Robinhood Gold membership, and youβll get access to 5.00% APY2on your uninvested cash3and the ability to buy and sell stocks 24 hours a day, 5 days a week.
Open and fund a Robinhood account and earn up to $200 in stock
What to consider if Donald Trump is reelected
In the eventuality of Donald Trump securing a second term in office, investors anticipate a continuation of his pro-growth policies and emphasis on economic stimulus. Sectors like oil and gas could gain renewed attention and investment, fueling prospects of growth.
Nevertheless, geopolitical tensions and trade disputes are changing the market, potentially introducing volatility and underscoring the importance of maintaining a balanced and diversified portfolio.
No matter who wins, never bet against America
Legendary investor Warren Buffett strongly believes in never betting against America. Regardless of the prevailing political climate or leadership changes, the resilience and innovation inherent in the American economy will endure.
Buffett's unwavering confidence in U.S.-based assets serves as a beacon of wisdom, advocating for patience, diversification, and a strong focus on fundamental value amid changes. No matter who's in the White House, America is a great place to build wealth.
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Bottom line
A long-term perspective and sound investment principles are your strongest allies in the face of any major change.Β Market gyrations are inevitable, but disciplined diversification can act as a shield.
By staying informed and resolute, you can prepare yourself financially to weather any storm, political or otherwise.
Masterworks Benefits
- Invest in art like a millionaire for a relatively low cost
- Art investments have outperformed the S&P 500 by over 131% for 26 years
- Purchase shares of artwork by top artists
- Hedge against inflation and diversify your portfolio
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