Market Returns During Election Years

The presidential election is finally upon us and this campaign season has been a doozy. After all the vitriol and partisan rancor saturating the airwaves, it will be nice to get back to more normal discourse—hopefully.

A number of clients have asked us how the election will affect the markets. The short answer is we don’t know. However, the past can give us some clues. With that in mind, please consider the lessons of history as contained in the slides above (click here to download a PDF copy).

Here’s the executive summary:

  • It is hard to spot a systematic return patterns in election years.
  • Markets are generally positive during election years and the year following election years.
  • Markets are forward-looking which means they have already discounted expected election outcomes into security prices.

We hope you find this interesting and enlightening.

 

Steven Merrell CFP®, MBA, AIFA® is an investment manager and Principal of Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey.   He welcomes questions that you may have concerning investing, taxes, retirement, or estate planning.  Send your questions to: smerrell@montereypw.com.