Ranking the Best and Worst Presidents – Part I
When the nation elects a new president, it marks a moment where Washington, D.C., and Wall Street converge. Wall Street closely watches election outcomes, analyzing their potential impact on stock and bond markets.
Numerous theories exist regarding how different election results influence market performance.
Some believe that Wall Street thrives when:
A new president from a different party is elected.
A president is re-elected to a second term.
A Republican or Democrat holds office.
But is there any actual evidence to support these claims? To explore this, we ranked the best and worst presidents purely based on stock market performance.
However, several critical caveats must be considered.
The Five Big Caveats
Caveat #1:
The Office of the President was established in 1789, while Wall Street was officially founded on May 17, 1792, with the signing of the Buttonwood Agreement. However, a recognizable stock market did not truly emerge until the late 1800s. Because of this, our analysis starts with the election of 1888, excluding the first 22 presidents.
Caveat #2:
The Dow Jones Industrial Average (DJIA) was introduced on May 26, 1896, initially tracking 12 major companies. Today, it follows 30. The S&P 500, launched in 1957, provides data dating back to the late 1920s. Our ranking relies on the S&P 500 from President Hoover onward, using the DJIA for earlier presidencies.
Caveat #3:
Returns do not include dividends. Over time, dividends have become a smaller portion of total market returns, making this factor more relevant for recent presidents.
Caveat #4:
The data is not adjusted for inflation, which benefits presidents who served during inflationary periods (e.g., Carter and Ford) and disadvantages those who led during deflationary times (e.g., Hoover and Bush).
Final Caveat:
President Donald Trump is not included in this ranking since his presidency was ongoing at the time of this analysis.
Ranking the Worst Presidents by Stock Market Performance
#1 - President Herbert Hoover (Republican)
Market Performance: -30.8% per year
Term: March 4, 1929 – March 4, 1933
Election Year: 1928
It’s no surprise that Herbert Hoover ranks as the worst president in terms of stock market performance. He assumed office just months before the Stock Market Crash of 1929, which led to the worst bear market in history. His presidency saw an annualized compound loss of -30.8%, with a staggering cumulative market loss of 77.1%.
Following his landslide victory in 1928, Hoover stated in his inaugural address: “I have no fears for the future of our country. It is bright with hope.” Just seven months later, on October 24, 1929, the world witnessed Black Thursday, when the DJIA plummeted 13% in a single day, marking the start of the Great Depression.
#2 - President George W. Bush (Republican)
Market Performance: -5.6% per year
Term: January 20, 2001 – January 20, 2009
Election Years: 2000, 2004
Unlike Hoover, George W. Bush did not inherit a crisis but instead took office following the Dot-com boom of the 1990s. However, his presidency saw multiple economic crises, including:
The Dot-com bubble burst (2001–2002)
The September 11th terrorist attacks (2001)
The Iraq War (2003–2011)
The 2008 financial crisis and mortgage collapse
While markets performed well between 2003 and 2007, a critical speech delivered at the New York Stock Exchange on January 31, 2007, warned against excessive executive compensation. Within a year, markets faced one of the worst bear markets in history, with the S&P 500, DJIA, and NASDAQ all declining over 50% between October 2007 and March 2009.
#3 - President Grover Cleveland (Democrat)
Market Performance: -4.9% per year
Term: March 4, 1893 – March 4, 1897
Election Years: 1884, 1892
Grover Cleveland is the only U.S. president to serve two non-consecutive terms (22nd and 24th president). However, his second term ranks as the third-worst for stock market performance.
His presidency coincided with the Panic of 1893, triggered by a major railroad bankruptcy that led to:
Over 500 bank closures
More than 15,000 business failures
Unemployment reaching 19%
This deep recession severely impacted the banking sector and contributed to the realignment of the Democratic Party, ushering in the Progressive Era.
#4 - President Richard Nixon (Republican)
Market Performance: -3.9% per year
Term: January 20, 1969 – August 9, 1974
Election Year: 1968
While Richard Nixon is most commonly associated with Watergate, his presidency was also marked by poor stock market performance and economic turmoil.
Key economic challenges during Nixon’s presidency:
High inflation and economic stagnation
The Vietnam War
Ending the gold standard (1971), leading to the collapse of the Bretton Woods system
Nixon’s economic policies, known as the Nixon Shock, aimed to combat inflation but ultimately worsened the situation. The result was a severe bear market from 1973 to 1974, where the DJIA lost approximately 45% of its value.
Read Part II
This analysis continues with a ranking of the best-performing presidents based on stock market performance. Stay tuned for Part II, where we explore which presidencies saw the strongest market growth and how their policies contributed to economic expansion.