There is an old saying that goes, “You may care more about the presidential election than your portfolio.”
We have created a couple of illustrations to help tell the story about the elections and what it means for your portfolio.
In “Split Decision,” we show how the Standard & Poor’s 500 performed is based on who wins the presidency and who controls the congress. As you can see, a split government (one party controlling the presidency and one branch of Congress, and the other party controlling the third branch of Congress) has historically created the most positive environment for financial markets. Of course, past performance is no guarantee of future returns.1
In “Adding Up the Presidents,” we show how the Standard & Poor’s 500 index has performed since 1957 under a Republican president and a Democratic president. The illustration suggests that other economic and business trends may have more of an influence on stock prices rather than those who occupy the White House. But again, it is important to point out that past performance is no guarantee of future returns.2
As election Tuesday approaches, here are a couple of concepts that we’d like you to keep in mind.
- Economy watch: Financial markets tend to be more driven by economic and company fundamentals, such as interest rates and corporate reports. Markets also tend to focus on the business cycle, which can give clues about overall economic activity and the job market.
- Tune out the noise: If you are nervous about the 2024 election, it may be best to tune out some of the noise. Elections tend to have less impact on the market than politicians may want you to believe.
- Keep your focus: Anticipate financial market volatility as election day approaches but try to manage your emotions and stay focused on your long-term investment strategy.
We can promise you one thing: there may be a surprise or two as November 5 draws closer. If you see something that is making you question your investment approach, please contact us and let us know what’s happening.
- BairdWealth.com, 2024. The S&P 500 Composite Index is an unmanaged index that is considered representative of the overall U.S. stock market. Past performance does not guarantee future results. Individuals cannot invest directly in an index.
- Microtrends.next, 2024
