Politics vs. Performance
A fascinating table by Peter Mallock (see the image below) illustrates what would have happened to a $10,000 investment in the S&P 500 over the past 80+ years, depending on who was in office.
If someone invested only during Republican presidencies, the investment would have grown to $289,000. In contrast, under Democrat-only periods, it would have reached $692,000. However, if the investment was maintained continuously—regardless of political leadership—it would have soared to over $20 million.
The Real Message Behind the Data
While the chart appears political at first glance, the key takeaway is straightforward: attempting to time the market can be costly. Warren Buffett encapsulates this perfectly by stating that mixing politics with investing is a mistake. The same is true for any reason to jump in and out of the market. Missing just a few key years can significantly impact long-term results.
Compounding Works Only If You Let It
When you stop investing for years, you risk missing out on the strongest market rallies. Some of the best growth periods may occur when you’re out of the market, often due to poor timing or fear. Even if annual returns are modest, staying consistently invested allows compounding to work its magic over time.
Don’t Try to Be Perfect — Be Consistent
The goal isn’t to invest blindly but to stay engaged with the market. Investors can still employ strategies such as riding winners and avoiding losers, but pulling out entirely due to forecasts, politics, or emotions usually leads to missed opportunities. Consistency, rather than prediction, is the key.
Have you ever tried to time the market and regretted it later? Share your experience in the comments! If you found this blog insightful, please SHARE it with your friends!
