Election Year Markets: Insights from the Past
Scandals, sensational headlines, and fierce rivalries—no election year is complete without them. The 2024 election has already proven to be one of the most polarizing in modern history, and the unexpected twists and turns, amplified by constant media coverage, have only heightened the sense of uncertainty. The stakes feel higher than ever, and many Americans find themselves anxious about what the future holds. Naturally, this uncertainty extends beyond politics, prompting many to question how their financial portfolios might be impacted by the election results.
Historical Stock Market Performance Around Elections
Of course, past performance is no guarantee or indicator of future performance. But as an investor, it may interest you to see how the stock market has performed historically during and after presidential election years. Below we’ve charted out the S&P 500 returns around elections since 2000:1
In the long run, economic fundamentals and global events have typically had a much greater impact on stock performance than elections. Factors such as the business cycle, interest rate changes, civil unrest (both domestic and international), trade wars, technological advances, tax policy changes, and even global health crises play a significant role in shaping market outcomes.
As our recent quick take How Much Impact Does the President Have on Stocks? illustrates, the long-term trend of the stock market has remained upward, regardless of which party the winning presidential candidate is from. While short-term volatility around election time is common, these fluctuations tend to have little impact on the market's long-term trajectory. Investors who remain focused on their long-term financial goals and avoid reacting to short-term political events are more likely to see success over time.
This article is intended for educational and informational purposes only and does not constitute specific tax, legal, investment, or financial advice. The information provided is derived from sources believed to be reliable and is based on current tax laws and regulations as of the date of publication, which are subject to change. Aegis Wealth Management, LLC is not a law firm or accounting firm and does not give legal, accounting, or tax advice. Readers should consult with a qualified legal and/or tax professional to understand how these laws and regulations may apply to their unique circumstances. This material is not intended to be relied upon to avoid tax penalties under U.S. federal tax law. Past performance does not guarantee future results. All investing involves risk, including risk of loss.