At his second inauguration, President Trump made it clear that big business had a special place in his presidency. He placed Elon Musk of Tesla and SpaceX, Jeff Bezos of Amazon, Mark Zuckerberg of Meta, Sundar Pichai of Google and Tim Cook of Apple in front of cabinet nominees like Robert F. Kennedy Jr. And that was just the start.
Since then, Mr. Trump’s policies have given businesses — including his own family’s — priority over other concerns and have blurred traditional lines between commerce and politics. The president has accepted gifts worth millions, held on to a stock portfolio that made 3,600 trades and increased his family’s net worth by more than $2 billion through deals and investments, including $1.4 billion from his family’s cryptocurrency businesses. This month, Trump Media & Technology Group, his family’s social media platform, started selling early access to market-moving presidential announcements.
Democrats have accused Mr. Trump of corruption. The president denies that, dismissing concerns about apparent conflicts of interest and saying he is bound in all he does by his “own morality.”
What should ordinary investors make of all this?
There’s no doubt that Mr. Trump is behaving differently from his predecessors, and that insiders have an advantage. At the very least, I see the appearance of conflicts of interest as an added risk to markets that already face plenty of it. Here’s a quick reminder of other risks well worth worrying about: the market’s big bet on artificial intelligence; on-again, off-again tariffs; war with Iran; inflation; the independence of the Federal Reserve; the loosening and elimination of financial regulations; and rising national debt levels.
That catalog is just a start. It provides ample reasons for prudent people to increase allocations to safer assets like high-quality, short-term bonds. Nonetheless, for long-term investors — those putting money aside for retirement, a home, education or any other important purpose — I continue to believe that it makes sense to stay the course. Holding cheap, broad index funds that capture the returns of the entire stock and bond markets is a well-proven strategy.
Indeed, that strategy has excelled during this administration, just as it has over much longer periods.
What’s more, expressly political investment strategies — like holding shares in companies because of their financial support of Mr. Trump and to the Republican Party — have not done well lately. In fact, they’ve underperformed investments in companies that donate to Democrats.
When it comes to investing, forgetting about politics may be unwise — even impossible — in the United States today. But I do think it is wise not to play politics. Some numbers illustrate the power of this discipline.
Presidential Returns
I looked first at the overall stock market under Mr. Trump. Based on performance alone, it has been strong, on a historical basis, in both of his terms in office.
At my request, Paul Hickey, a founder of Bespoke Investment Group, calculated the price performance of the Dow Jones industrial average for every administration since Sept. 14, 1901, when Vice President Theodore Roosevelt took office in Buffalo after the assassination of President William McKinley.
For that entire period through Monday, the median price return (without dividends) of the Dow was 4.9 percent annualized. Under Democratic presidents, it was 6.9 percent; under Republicans, 4.4 percent.
The market under Mr. Trump has been much better than that.
In his second term through Monday, the Dow rose 12.6 percent, annualized, compared with 12 percent a year for his first term. By comparison, under President Joseph R. Biden Jr., the Dow rose 8.7 percent, annualized. Under President Barack Obama, the number was 12 percent.
What’s more, during Mr. Trump’s first term and Mr. Obama’s entire time in office, the market was similar not just in overall returns but in granular ways. For example, the consumer discretionary, technology and health care sectors were top performers under both presidents, while energy was the worst. Investors who stayed out of the market for political reasons, during either of their presidencies, paid dearly for that decision.
Leaning Into Politics
It’s easy to use politics as a guide in investing, but it hasn’t been a reliably profitable approach in public markets during Mr. Trump’s second term.
I looked at two exchange-traded funds with explicitly political strategies. One uses the stock ticker MAGA. Its full name is the Point Bridge America First ETF, and says it’s meant for people who want “to invest in companies that align with your Republican political beliefs.” The fund tracks 150 S&P 500 companies “whose employees and political action committees are highly supportive of Republican candidates” through campaign donations.
I paired MAGA with a fund that uses DEMZ as its stock ticker and calls itself “the first investment product that strives to replicate the S&P 500, without the G.O.P.” The fund contains shares of “companies that have made over 75 percent of their political contributions to Democratic causes and candidates.”
In addition, I looked at the returns of a company that is singularly Trump. That’s Trump Media & Technology Group, which houses Trump Social, the president’s social media platform. Mr. Trump is the biggest shareholder in Trump Media, with a stake held in a trust managed by his eldest son, Donald Trump Jr.
Here are the returns of all three investments, plus the S&P 500, from Mr. Trump’s second inauguration through Wednesday, according to FactSet:
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Point Bridge America First (MAGA): 15.4 percent.
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Democratic Large Cap Core (DEMZ): 28.5 percent.
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Trump Media & Technology Group: -75.8 percent.
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The S&P 500: 27.6 percent.
Just for the fun of it, I also checked the stock performance of Mr. Musk’s two publicly traded companies, Tesla and SpaceX. Recall that for a time, Mr. Musk ran Mr. Trump’s so-called Department of Government Efficiency, or DOGE. While he and the president had a falling-out last year, Mr. Musk is a major contributor to Republican political campaigns. He is among the most political of chief executives, but his Republican ties haven’t seemed to have helped his companies’ shares.
Here are their returns, also through Wednesday:
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Tesla, from the inauguration: -11.6 percent.
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SpaceX, from its initial public offering on June 12: -6.9 percent.
All told, the S&P 500 index beat all of these investments except for the Democratic-oriented fund.
This isn’t a scientific study, by any means. Some companies have benefited from political connections. My point isn’t that such relationships don’t exist. It’s that for most investors, it’s been wise to ignore them.
Eyes Wide Open
That said, there is a reason to pay some attention to the broad strokes of politics. Academic studies have shown that pervasive government corruption can impair economic growth and could also have negative effects on the markets.
The annual Corruptions Perceptions Index by Transparency International, an independent group, showed the United States slipping in 2025 to 29th place, tied with the Bahamas and just above Brunei and Chile — and way behind leaders like Denmark, Finland and Singapore. The United States ranked 14th in 2000 and 18th in 2016.
This index is based on 13 surveys covering 182 countries and territories. If that increasingly poor perception were to continue, it could hurt financial markets. This bears watching closely, and I intend to scrutinize objective and quantifiable studies of the U.S. economy and government on this subject as they appear.
For now, however, the evidence suggests that the old-fashioned, apolitical approach to investing is still working.
Mr. Hickey of Bespoke says that through the years, under both Republican and Democratic administrations, he has frequently heard from investors who simply can’t stand the people in office and want to pull out of the markets because of politics.
“In hindsight,” he said, “the one thing both groups can agree on is that they’re glad we talked them out of it.”
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