Any answer to that question is, of course, purely speculation — but that has never stopped forward-thinking investors before.
In January, Forbes contributor Gene Marcial reported that the S&P 500 stock price index climbed 57.9 percent during President Barack Obama’s first term in office. For some context, that is the fifth-best performance on record, queuing up in the history books behind the 70 percent gain experienced under President Bill Clinton’s first term. (For the curious minds, the market declined 8.2 percent during President George W. Bush’s first term.)
The average first-term gain in the S&P index for all presidents is 37.8 percent, which is pointedly higher than the average gain of 17.3 percent for the second term. If Obama leads the second-term average by the same margin that he led the first-term average, the market will rise about 26.4 percent. Again, that’s a totally speculative forecast, but projecting historic performance forward is one way to form expectations about the future.
Supporting the bullish thesis are a number of increasingly optimistic economic forecasts. U.S. GDP growth in 2013 and 2014 is expected to be around 3 percent, instead of estimates in the low- to mid-2 percent range that were formulated at the end of 2012. Equity movement since the beginning of the year has also been positive, and although fears of a pullback punctuate market dialogue, optimism seems to be winning the day.
With that said, here’s a look at some stocks that could outperform in Obama’s second term, courtesy of Marcial…