Many critics of the Obama administration are quick to jump to Fox News talking points, saying the economic recovery has taken far too long, and that the unemployment rate still hasn’t fallen back to pre-recession levels.
However, Obama’s supporters see it differently. They point out the president took office during the worst economic downturn since the Great Depression, and has managed to turn things around and get growth back on track. Back then, stocks were tanking. Frankly, most investors were scared to touch just about any asset, although there was some bounce in safe havens like gold and silver.
Not only can Obama be attributed for turning around the economy and getting the country back on track, U.S. stocks posted records on Thursday. Investors saw relatively modest gains after the Nasdaq Composite closed at its highest level ever, while the S&P 500 was only a hair away from a record close.
Nasdaq Posts First Record Close In 15 Years.
Fifteen years, one month and thirteen days. That’s how long it took the Nasdaq composite index to close above the record it set at the apex of the dot-com bubble on March 10, 2000.
The record-setting Nasdaq Composite (RIXF) end up 20.89 points, or 0.4%, at 5,056.
The S&P 500 (SPX) ended 4.97 points, or 0.2%, higher at 2,112.93, retreating from an intraday record of 2,120.52 set on Thursday, while the Dow Jones Industrial Average (DJI) added a relatively mundane 20.42 points, or 0.1%, to close higher at 18,058.69.
As expected, utilities, telecommunications and energy stocks were among the biggest gainers in the S&P 500.
If you took Obama’s advice, you’d be calling him the trader-in-chief.
It also doesn’t hurt Obama’s reputation, that in the depths of the Great Recession, he essentially predicted the precise point where stocks would hit their lowest point. Given that stock market fluctuations are largely based on speculation and psychological factors, it’s a challenging prediction for any Wall Street investment professional to make accurately, let alone a president. President Obama said:
What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.
S&P 500 history from March 2009-April 2015. Image: CNN Money http://money.cnn.com/data/markets/sandp/?iid=EL
President Obama said that at a press conference on March 3, 2009. All most impossible to predict, and even harder to believe, the stock market hit its low point only six days later, on March 9, 2009.
If you followed the stock market advice of our commander-in-chief, maybe you’d be calling him the trader-in-chief by now. Since President Obama miraculously predicted with accuracy the point where stocks bottomed out, the stock market has dramatically rocketed. By conservative estimates, if you invested $100 in a fund that tracks the S&P 500 around the time the president advised, your money would now be worth about $300 today. That’s a return of about 200%.
At the same press conference all those years ago, President Obama made it clear that he doesn’t believe his job is to track the “day-to-day gyrations” of the market. He noted, reemphasizing advice from arguably the most prominent investor, Warren Buffett:
The stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong.
Unfortunately in this case, many Americans did not follow the president’s advice. Only half of Americans have any money invested in the stock market and most of that is through their 401k retirement accounts. Far too many Americans have missed out on the fourth longest bull market in U.S. history.
So which assets have performed the best so far in Obama’s tenure?
Historically, the safe bet might be to say precious metals like gold, commodities or even the U.S. dollar.
However, this has not been the case so far, under President Obama. During Obamas tenure as POTUS, stocks are the clear winner.
Performance since Obama took office. Image: CNN Money http://money.cnn.com/2015/03/22/investing/stocks-market-best-investment-obama/
The only other assets class that comes close is real estate investment trusts (REITs), which trade like stocks but are companies that hold office buildings, malls and other properties and make money off the rents.
Different times. Different context.
Judge presidents by their accomplishments, not by their predecessors inheritance.
When it comes to politics and presidential tenures, there seems to be a lot of comparisons going on. Whether it may be in between President Obama’s economics and President Ronald Reagan’s Reaganomics, or George W. Bush’s mess and Obama’s cleaning up, it is difficult to compare presidents outside of a narrow context of time.
What we can do is judge them by their accomplishments, by how they faced the challenges of their time. Coming off arguably one of the most disastrous presidencies in our history, that of George W. Bush, who cut taxes yet involved us in two un-paid for wars, and crashed our economy and that of the rest of the world as a result, we found ourselves with our nation’ first black president.
Our economy in shambles, two wars continuing and with no real end in sight, let alone any idea of what, exactly, would constitute victory, Barack Obama stepped up to the plate, called his shot, and made his play.
The facts prove that Obama’s time in office has been successful, even impressive. The wars are apparently over, the economy is thriving. Unemployment has dropped and we have seen record levels of job growth. By all measures of success, Obama’s presidency has been exceptional. Even Wall Street agrees that Republicans are killing the economy, and the evidence proves that the economy grows more under Democratic than Republican presidents.
