Exactly nine years ago, on Friday, March 6, 2009, the S&P 500 index dropped to an intraday low of 666.79. This level also ended up being the bottom of the stock market’s decline in the midst of the Great Recession.
Three days earlier, Obama, who entered office in 2009 — the year after stocks lost nearly 40% — answered a reporter’s question about the stock market. But he could not have known that it would end up being one of the most perfectly timed market calls ever.
On March 3, Obama told reporters: “What you’re now seeing is profit-and-earnings 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.”
Since then, the stock market has nearly quadrupled, with a gain of about 308%. And, the nine-year bull market in stocks is now the second-longest ever.
Just a few days after Obama’s stock-market call, the S&P 500 tumbled 4% to a 12-year low after General Motors’ auditors warned the company could soon be bankrupt. But he had also offered a valuable lesson in investing, which would come handy when the next recession or bear market hits.
“What I’m looking at is not the day-to-day gyrations of the stock market, but the long-term ability of the United States and the world economy to regain its footing,” Obama said. “And 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.”