With the election just 3 weeks away, I thought that you might appreciate seeing some of the market return numbers for presidential and congressional mixes historically. This presidential election is being referred to as one like “no other”. It certainly feels that way, although there have been others with plenty of turmoil and division. As always when considering the investment principals that should guide us, it’s important to keep our focus on the long-term view and to consider the historical statistics that provide insight.
The attached piece provides a look at investment returns based on which political party is in power. With so much uncertainty regarding, not only the next president, but the control of congress, it is encouraging to know what the market has produced during various combinations of control in Washington.
Here’s a few key takeaways from the statistics that are provided in the attachment:
There have been 23 elections since the S&P 500 Index began. In these election years
(possible outcomes for 2020):
• In 19 of the 23 election years (83%) provided positive performance
• When a Republican was in office and a Republican was elected (or reelected), the total return for the year averaged 11.9%
• When a Republican was in office and a Democrat was elected, the total return for the year averaged -2.6%
(possible outcomes for 2021):
• In the first year following an election year, 8 of 11 were positive with the average returns landing in the high double-digits.
• First year average returns: Democrat 19%, Republican 12.3%
If you’d like more input, or have questions or comments, please don’t hesitate to contact me!
Jack Schniepp is a CERTIFIED FINANCIAL PLANNER™ (CFP®, ChFC®) and the owner of Cascade Financial Strategies. CFS is a registered investment advisor licensed in Oregon, California and Idaho. They specialize in socially responsible investing which integrates environmental, social, and corporate governance (ESG) criteria into portfolio construction.