How are you feeling about this year’s election? If you are worried it may affect your investments or long-term financial plan - you are not alone.

In this month's newsletter we uncover five facts about markets in presidential election years looking back over the past 100 years. 

Over the last century, we’ve had 24 presidential elections. In 82% of those elections, the stock market has seen positive returns. That means only 18% have had negative results.¹

The graphs below show the average stock market returns for each of the 24 different presidential years over the last century.^1,2

Year three after a presidential election tends to be associated with the strongest market performance. In fact, about 91% of the time, year 3 in a presidency has positive market returns.¹ 

The positive market returns may be tied to the fact that year 3 is when early years’ work, like newly written legislation, is finally passed. It can also be when a president starts thinking about reelection and setting the stage for campaign strategy.

Here’s how market returns have generally fared in each year of a presidency over the last century or so.¹

S&P returns tend to be lower with a Democrat elected to the Presidency versus a Republican. Notably, positive returns tend to occur regardless of party affiliation—and it does matter who controls Congress. The markets don’t typically like one party to sweep the Presidency and Congress, with either Republicans or Democrats controlling it all. That tends to cause short-term volatility.

Instead, the markets usually prefer checks and balances and the stability of divided government.⁴

Political passions and parties aside, it is crucial to remember that the U.S. economy has grown over the last century, regardless of whether a Republican or Democrat is sitting in the White House. That’s meant trillions in economic growth, making the U.S. economy the largest in the world—despite party affiliations and political divides.⁵

In elections and the markets, there are no absolutes or certainties. Several diverse and highly complex factors from inflation and recessions to conflict abroad, unrest at home, and more can affect market activity and how elections unfold.

As helpful as trends and forecasting may be, remember, nothing’s set in stone until it actually happens. So when it comes to both elections and the markets––your choices matter.

Did you know any of those facts about elections and the markets? Did it provide any confidence in the uncertainty that is to come? 

Through your investing journey it is important to remember that both elections and the markets run on cycles, and no two cycles ever look exactly the same because of countless varying factors.

Trying to account for an election can be overwhelming and can get in the way of prudent choices, especially if we try to time the markets or make money moves based on political preferences or predictions. 

That’s why it’s important to focus on the facts, keep your eyes on the long-term picture, and check in with the people you trust.

We hope this month's article showed that the outcome of the market is so much bigger than political parties and who wins the Presidency.

If you found it helpful, please share with a friend who could benefit from a fresh perspective and invaluable advice for weathering the next political storm or any volatility in the markets ahead. 

Warmest Regards,

The TMFG Team

P.S. Any questions? Shoot us an email; we are always here for you! Not receiving our newsletter yet? Scroll down to sign up! 

Not receiving our newsletter?

Get insightful info on finances and more in your inbox every month with the

The Miller Financial Group

https://www.tmfg.com

yourteam@tmfg.com

(561) 353-3700