President Obama s got his work cut out for him enacting the policy initiatives he outlined last night. Turns out, the stock market faces its own battle overcoming the lackluster performance that s typical of a Democratic president s second year in office.

Since 1897, the median market return for a Democratic president s second year in office is -2.8%, according to Bespoke Investment Group, a money management and research firm. Republican presidents, on the other hand, enjoyed, on average, a 9.3% returns in their second year. Of course, few expect a repeat of last year s blockbuster returns. With a gain of nearly 33%, Obama joined Franklin Roosevelt and Harry Truman as one of only three presidents to see the Dow Jones Industrial Average rise by more than 30% in their first year of office, according to Bespoke. Those presidents increased the size of government right when they came into office, so there was a big shock of money coming into the system that might ve boosted equity prices, says Paul Hickey, Bespoke s co-founder. So much for Democratic presidents being bad for business.

What does this mean for investors at home? When it comes to overall market performance, does the occupant of the Oval Office really matter? Probably not, says Ryan Detrick, senior technical strategist for Schaeffer s Investment Research, an options trading and education firm. Investing is a multiyear process, Detrick says, and presidential market cycles shouldn t prompt an overhaul of investors portfolios. Schaeffer s data, which goes back to 1949, shows first-term Democratic presidents have an average return of 18% in their third and fourth years in office.

It s also too late for investors trying to trade on some of Obama s proposed policies, says John Mayo, professor of economics, business and public policy at Georgetown University s McDonough School of Business. For example, those considering shorting bank stocks to play proposed new banking regulations should probably not bother professional traders thought of that months ago, Mayo says, and the easy money s been made. Indeed, some disputed accounts tying last week s market swoon to Obama s proposed Volcker Rule banking regulations. Maybe people on the moons of Jupiter didn t see it coming, says Barry Ritholtz, CEO and director of equity research for Fusion IQ, a research firm, and author of The Big Picture blog. But Obama s announcement shouldn t have surprised anyone else, Ritholtz says, and thus it shouldn t have moved the forward-looking markets.

Ritholtz sees market analysis as a kind of Rorschach test. People who have a political agenda always see in the market what they want to see, he says. While Washington policies can affect stock performance to some degree, Ritholtz says, what mainly moves the market are traders perceptions of valuation and company earnings.