Investing in an Election Year

Investing in an Election Year

Political news will dominate the headlines for 2024, and we all know this can be contentious and anxiety-provoking. There is a tendency among investors to worry — especially now — but historically, presidential election years have been very good for stocks.

The White House.
In the year ahead, it will be critical to remember that there are things in your control and things out of your control. Spending time and energy on the things you can control will make it easier to withstand any potential headwinds that may occur.

S&P 500 Performance in Presidential Election Years

Chart showing S&P 500 performance in presidential election years from 1952 to 2020.
Going back to 1952, the stock market has declined only three times in a presidential election year. In re-election years, the S&P 500 has not declined since 1948.
There will be lots of noise from candidates about potential policy changes that could affect retirement, estate or tax planning. It can be tempting to react in anticipation of what may happen, but you must be careful not to overreact to the news.

Politics Doesn’t Matter Much for Investors

Chart showing the average performance of a $10,000 investment   during periods of Republican and Democrat leadership since 1936.
Historically, the party that wins the election has had little impact on long-term market returns.

Sources: Capital Group, Standard & Poor’s. Each 10-year period begins on January 1 of the first year shown and ends on December 31 of the 10th year. For example, the first period covers Jan. 1, 1936, through Dec. 31, 1945. Figures shown are past results and are predictive of results in future periods.
As measured by the S&P 500, the 10-year annualized return of stocks from the start of an election year is over 10% for both Republicans and Democrats. If volatility arises this year, it will provide opportunities for investors who stay focused on long-term investments.

The Bottom Line: Don’t Mix Politics with Your Portfolio

Promo for article titled 4 Keys for Keeping Your Investments on Track, No Matter What 2024 Brings.

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