We’re going to have a new President in 2025, and for the first time since Grover Cleveland was re-elected in 1893, we already have the playbook for how the non-incumbent candidate is going to operate in the White House. Here’s why I’m selling stocks before the Trump presidency, despite the initial Trump Bump in the market last week: because my life circumstances dictate that I sell stocks.

I’m finally getting serious about looking at houses (that I can’t afford) in the San Francisco Bay Area and need to increase my cash position for a potential down payment. That’s it. That’s why I’m selling stocks before Trump 2.0.

For context, I have most of my net worth working for me in the stock market, and I’ve been gambling through inaction—to my benefit—by keeping it all in index funds despite my short-term time horizon. But I need to take some chips off the table so I can afford a permanent dwelling in which to furnish with a table. Of course, I’ll still have plenty of exposure to the stock market through my retirement accounts, but the majority of my brokerage account will likely be re-allocated to real estate.

Would I have sold stocks before a Harris presidency?

Yes, of course! For the same reason. It’s my hope that this clickbait headline tricked you into reading some of the oldest personal finance advice in the book: personal finance is just that—personal! The results of an election are not cause for re-evaluating your financial situation. The truth of the matter is that nobody knows what the hell is going to happen—be it in the markets or the world at large. There are always going to be reasons to be optimistic, pessimistic, agnostic, or just plain ticked. Manage your portfolio according to your own set of circumstances. Anything beyond that is mostly guesswork.

That’s not to say there aren’t certain policies that will have an impact on the performance of various sectors. But for that, I recommend a simple allocation into any of the Nancy Pelosi ETF offerings available at your local brokerage house. While you may be able to use outsider information to your advantage—as we’ve seen with investors attempting to trade the election news—it’s well known that stock picking is a losing game in the long run, so tread carefully if you’re wading into those waters.

Will Trump’s performance trump Trump’s performance?

Just for fun, we might as well revisit the first version of the Trump presidency to see if we can’t blindly make investment decisions on future performance based on past results.

An excellent Kiplinger article, which ranked all of the presidencies based solely on market performance, brings about good news—albeit with a major caveat. Through Trump’s first term (Jan. 20, 2017-Jan. 20, 2021), the annualized market return of 13.6% ranks as the third best among Presidents. Although, just as the current Trump Bump in the market is happening under Biden’s watch, Trump’s record benefited during the time period in which the nation was assured that he would no longer be President. Kiplinger sums it all up:

Donald Trump’s presidency was far from calm, and you could say the same for the stock market during his tenure. Equities just barely managed to avoid bear-market territory in Q4 2018, then ended up rallying for more than a year before suffering a dramatic (albeit quick) bear market in 2020.

Even then, Trump still managed to finish his single term as one of the top presidents by market performance, which was fueled in part by his Tax Cuts and Jobs Act. However, that performance also included a wild rally after Election Day 2020.

“The S&P 500 gained 11.8% in price from Election Day on November 3, 2020, through January 15, 2021, in what is now on track to become the best Election-to-Inauguration Day return for a first-term president since WWII,” writes CFRA’s Stovall, referring to Biden’s pre-inauguration bump. “John F. Kennedy came in second with an 8.8% price rise, while Eisenhower was third with 6.3%. Conversely, Presidents Obama, Bush-43, and Nixon endured declines of 19.9%, 6.2%, and 1.4%, respectively.”

Despite a global pandemic and subsequent volatility that led even the most sensible among us toward meme stonks and crypto, Trump fared pretty well in the markets during his first go-round.

The Grover Cleveland conundrum

Now, as for our only data point on non-consecutive presidential terms, the results are less favorable. Cleveland’s second term, spanning from March 1893 to March 1897, did not fare so well. The -4.9% annualized return may have been simply a product of bad luck, but variance is high in small sample sizes, and our data on non-consecutive terms could not be smaller. As Kiplinger explains:

For the third-worst president in terms of stock market returns, we have to go back to the late 1800s and the second presidency of Grover Cleveland.

Most of the poorer-performing presidents had their share of mistakes that helped contribute to the lousy market returns of their presidency. Cleveland, on the other hand, was just unlucky.

By any historical account, he was a responsible president who ran an honest and fiscally sound administration that believed in free trade and sound money. He was respected by voters and by his peers in Washington. But then the Panic of 1893 hit the banking system and led to a deep depression.

The recovery came swiftly following Cleveland’s second term, with consecutive annual gains of more than 22% in 1897 and 1898. But the damage was done. Making it even more difficult to draw conclusions on the Cleveland comparison is the fact that the stock market, as we know it, did not really exist until 1886—during his first term.

What can history teach us about elections and finances?

There’s a big difference between half of the country being greatly depressed about an election and an election bringing about a Great Depression. A history lesson on the 30.8% annualized loss in the Hoover administration is a good reminder that things can always get worse—just as they can always get better.

We don’t get to choose the time period we live through, but we can choose our part in the play and the characters we cast in it. Just remind yourself, hundreds of years from now, future generations will simplify the entirety of our lifespans into nothing but historical stock market data points on whatever the Mars equivalent is to an excel spreadsheet.

There’s a lot that we can control when it comes to personal finance, and there’s a lot that we can’t. Control what you can control and position yourself as best you can for uncontrollable. The only certainty is that there will be uncertainty, no matter the President.