Buffett bought his first stock in 1942 and has invested under every president since. His success through all kinds of political climates led him to coin the famous line: “If you mix politics and investing, you’re making a big mistake.”
There isn’t some golden, predictable pattern when it comes to presidents and the stock market. Stocks have soared when both Republicans and Democrats were in power. Stocks have tanked when both Republicans and Democrats were in power. However, stocks usually rise regardless of who controls the White House.
That’s not because markets “only go up.” It’s because American businesses are moneymaking machines, which drives stock prices higher.
It’s easy to get caught up in the noise…But when it comes to investing, it’s a distraction.
When Trump won in 2016, he promised to rebuild the US military. That lit a fire under the largest defense contractor, Boeing Co. (BA). When Biden was elected in 2020, it seemed like everyone was screaming, “Buy pot stocks!”
In short, some companies live and die on election results and narratives. Buying these types of stocks is like flipping a coin.
The best disruptors shrug off elections and economic concerns. Amazon (AMZN)… Apple (AAPL)… and DNA mapper Illumina (ILMN) recovered quickly after the 2008 election and financial crisis.
Right now, two of the big megatrends we’re capitalizing on are artificial intelligence—specifically “phase 2” of the boom, which includes the infrastructure buildout—and biotech.
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