On the eve of the 2024 Presidential Election, we reflect on historical trends and insights from our election research, captured in four charts.
Navigating Market Anxiety Ahead of the Presidential Election
Market reaction to elections are often unpredictable, and trying to time your investments around them can be a risky strategy. In fact, since 1928, there have only been two instances where the market dropped double digits within 30 days post-election. The first was during Obama’s victory amid the Gloal Financial Crisis, and the other was the 1948 “Dewey Defeats Truman” election.
Staying Invested Through Political Cycles: A Key to Long-Term Growth
As we often say: your time in the market is more important than timing the market – and this is especially true when it comes to investing through different political administrations. The data consistently shows that staying invested, regardless of who is in power, leads to far better long-term outcomes than trying to invest along party lines.
Political Bias and Market Performance: Separating Emotion from Strategy
When we break down presidencies based on their average Gallup approval ratings, an interesting pattern emerges: the four most popular presidents saw average annaualized stock market returns of 10.6%, while the four identical – proving that approval ratings or personal preferences have little to no impact on market performance.
The Real Impact of Presidential Elections on Wealth Accumulation
This illustrates what happens when we invest $10,000 on November 1st of each election year since 1948 and hold it for ten years. In 16 of the 17 election periods, that $10,000 investment grew beyond its starting amount – only the “lost decade” was an exception. More notably, in 13 of those periods, the investment more than doubled. What’s interesting is how evenly the results are split: 7 times under Democratic presidents and 6 times under Republicans.