The Stock Market & Elections
Today is election day. There's much news, obviously, but I love a good chart, and here are some that I found interesting. They tell us something about how the US stock market reacts to presidential elections and political parties. The bottom line is that the stock market doesn't care what political party holds the office of POTUS. On average, It keeps going up year after year.
There is an interesting historical trend that the S&P500 tends to do better in the month after a presidential election, once the uncertainty of the election is over. You can see this in the month of November below.
Source: Goldman Sachs GIR
Breaking it down a bit, you can see the average return and growth rates in election years. This year, October was no different, with the S&P 500 declining 0.9%.
And as a final caution to anyone who thinks about investing only under one regime or another, there's a severe penalty to doing so. I would avoid that kind of investing policy!
Disclaimer: The information provided in this blog post is for educational and informational purposes only and does not constitute specific financial, tax, or legal advice. All investing involves risk, including the potential loss of principal. Market data and statistics cited are believed to be accurate as of the date of publication, but are subject to change. Please consult with a qualified financial professional to discuss your individual circumstances and risk tolerance before making any investment decisions.