How Did Stocks Do The First Year Under President Biden?

Posted by lplresearch

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Friday, January 21, 2022

President Biden took over the Oval Office a year ago yesterday, on January 20, 2021. So how did things go for the stock market? Let’s dive into it.

“The Dow gained 12.3% the first year under President Biden, which is right about the average first year return of 12.1%,” explained LPL Financial Chief Market Strategist Ryan Detrick. “But where things really stand out is how many new highs were made, with a very impressive 43 new highs, the third most ever.”

As we share in the LPL Chart of the Day, the Dow gained 12.3% during his first year in office, which ranks 9th out of all the first years for all Presidents since 1900.

View enlarged chart.

Breaking it down a little more, stocks historically have done much better under a Democrat that first year than under a Republican, although that 91% gain under FDR had a lot to do with that. Still, stocks rose more than 30% during both President Obama’s and President Trump’s first years, breaking with the historical trend.

And of course, let’s not forget that stocks did amazingly well right after President Biden won the election in November 2020, so you could say some of those gains were pulled forward perhaps. Here’s a chart we shared a year ago on this. It was the best Election Day to Inauguration Day return ever.

View enlarged chart.

Lastly, the stock market’s gain during President Biden’s first 100 days in office was one of the best ever.

View enlarged chart.

All in all, the economy and stocks did quite well the first year under President Biden. Given this is a midterm year and emotions will run high, we want to remind investors to separate your politics from your investments. Many people have not liked past Presidents, only to miss out on big gains. A strong economy (and we expect it to be this year) matters a lot more to your investments than the makeup of Congress or who is in the White House.

For more on midterm years and why this year could be quite volatile, please watch the latest LPL Market Signals podcast with Jeff Buchbinder and Ryan Detrick, as they break it all down.


This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index and market data from FactSet and MarketWatch.

This Research material was prepared by LPL Financial, LLC.

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