When making long-term investments, history shows us that we should ignore contentious elections and politics. We should stick with our investment plans despite the constant negative ads and commentary that we see everywhere.

And why is that? Well, with our Presidential election now about 6 months away, let’s look at a few statistics together. 

Presidential election years have actually had slightly better market returns than the average year. The S&P 500 has returned 11.6% per year on average in election years since 1926, compared to 10.3% in all years. However, during presidential election years you have often had to endure a slow start to get to a strong finish.

This chart from Blackrock shows the return of the S&P 500 by quarter during election years in orange and all years in yellow. 

The average total return for the first half of election years has only been 2.8%, while the return in the second half has been 9.5%. 

Also, as a reminder from our January 9, 2024 Market Outlook video, when we looked at the data going all the way back to FDRs reelection in 1936, the market has never been negative when an incumbent president is running for their 2nd term. The average return in the 10 times this has happened over the past 90 years has been 17.4%. 

We are sure that this will be a very contentious election. However, the market has historically performed quite well in presidential election years. So try to tune out the noise and stick to your long-term plan. 

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.