Historical Markets in Presidential Election Years

You may have heard there is an election coming up this November.  Historically, the stock market can be volatile in the months leading up to a presidential election, but some context around the reasoning can be helpful in keeping your investment strategy intact.

Any increase in market turbulence may have a more profound affect on investors this year as it has been abnormally low in 2024.  Investment in certain sectors may be viewed as more favorable under one party administration versus another; so short term reactions anticipating policy changes can drive uncertainty leading to fluctuations.  Things usually stabilize post-election as unpredictability abates.  Historically, the US market has performed well under both Democratic and Republican presidencies as broad economic fundamentals, rather than shorter term political events, have a much greater impact on market performance.

When consuming traditional news and political commentary, market performance will inevitably be mentioned.  While staying informed is essential, it is important to understand that movement is largely based on sentiment and should not be a main consideration when making portfolio decisions.  A long-term perspective, diversified investments, and balanced emotions help you reach your financial goals.

Further Details on Historical Markets in Presidential Election Years