Investors are betting big that President-elect Donald Trump will be good for the stock market once the takes office in a few weeks, in a post-election rally not seen since voters sent Dwight Eisenhower to the White House in 1952.
But, over those past six decades, stock market rallies in the early days of a change of administration aren't necessarily a great predictor of investor returns over the full term of the incoming president.
The stock market's jubilant response to Trump's election is being compared to the reaction to Ronald Reagan's 1980 defeat of Jimmy Carter. Both Trump and Reagan campaigned on a platform that promised sweeping deregulation, a prospect that investors assume will help companies boost profits.
Reagan's post-election rally fizzled within weeks, though, thanks to an aggressive series of interest rates hikes in late 1980 aimed at snuffing out double-digit inflation. Between Election Day and the end of the year, short-term rates surged from 14 percent to just more than 20 percent.