Stocks & Elections
It's often a non-event!
As elections approach, our knee-jerk reaction is to become much more conservative by nature. On the surface this makes good sense, but how do markets typically perform before and after elections? A look at some data is warranted to analyze. With regard to market returns both before and after elections, most observable returns fall between +5% and +30% returns (as defined by the S&P500 Index) by the 12th month after election day.
Markets are most often positive after elections!
Based on this data set, you can see that most elections only affect stocks in the short term and are positive in the vast majority of cases when viewed over the long term. Further evidence that keeping your eye on the long term is the best advice for those with at least 12-24 months of patience!
The wise investor buys his or her investments around their goals - not an election!