Investment Insights: The impact of the election on the markets and your portfolio

Investment Insights: The impact of the election on the markets and your portfolio

With the presidential election only a few months away and given all the questions and opinions I receive about how one outcome or another will likely influence the markets, I thought it would be helpful to spend some time on this topic. Irrespective of my personal beliefs and viewpoint, this is intended to be a completely objective and nonpartisan article. Although the literature suggests that the markets may tend to favor Republican or Democratic presidents over extended periods of time, discrepancies favoring one party or another can be explained by events occurring during or before their terms. A July 10, 2020 Retirement Insights article by Bob French does an excellent job of summarizing the available data. The information Mr. French provides indicates that in time periods over which one party controlled both houses of Congress and the presidency, the S&P 500 Average (which represents approximately 80 percent of the value of all domestic stocks) gained, on average, over 14.5 percent per year. In periods with Democratic presidents and in which the Republicans controlled at least one house, the S&P averaged almost 16 percent per year. With Republican presidents and the Democrats controlling at least one house the market gained about 7 percent per year. A Financial Times article from March 4, 2020 cited Nataxis Investment Managers Research for their findings that since 1976 under Democratic presidents the stock market has gained 14.3 percent per year while under Republicans presidents, 10.8 percent. But regardless of who occupies the White House we ...
More on: journaltimes.com