It’s an Election Year! Stocks Have to Behave Differently
01 Jun 2016
Well, the reality is that stocks don’t just perform differently, they perform better*. Since 1928, the S&P 500 has had an average total return of slightly better than +11% in all election years. There have been 22 elections since the S&P 500 index began; 82% of the time the index was positive. When a Republican was elected, the return was +15.6%. When a Democrat was elected, it was +7.6%.
As much as the media wants us to think that an election year will cause havoc, the fact is it doesn’t the majority of the time. Like most distractions (fiscal cliff, debt downgrade, Y2K, ISIS), the reality is that the markets typically do what they have done for the past 70 years. You just have to be in the market to participate in the market returns.