November 6, 2024
How might the U.S. elections influence markets?
Markets' initial reaction to the outcome of the U.S. presidential election has been very positive, but will the upbeat sentiment last? We take a closer look.
The 2024 election and your portfolio
In the wake of the November 5, 2024 election, review historical stock market trends prior to and after past elections and assess portfolio considerations for long- and short-term investors. Navigate the eight charts below to see how financial markets have generally shown resilience throughout four-year presidential election cycles, with changes in political party control of the White House and Congress appearing to have little discernible difference on long-term stock market performance.
Control of the White House
Stocks have risen over the long term no matter which party has been in the White House
Growth of a hypothetical $1,000 investment in the S&P 500 Index, 1/31/28–12/31/23
Election cycles
In four-year election cycles, stock performance has typically been best in the year prior to a presidential election
S&P 500 Index performance, 1928–2023
Party control
How stocks have performed under six different political scenarios
Average annual returns of the S&P 500 Index when different political parties were in power, 1928–2023 (%)
Election- vs. nonelection years
Relative to nonelection years, stocks have tended to lag prior to Election Day but come back following the vote
Cumulative average returns of the S&P 500 Index during 18-month periods before and after presidential and midterm elections versus nonelection periods, 1/31/28–12/31/23 (%)
60/40 portfolios
60/40 stock-bond portfolio performance has slightly lagged in presidential election years vs. nonelection years
Annual returns of a 60/40 portfolio, 1954–2023 (%)
Election volatility
Stock market volatility has been modest before and after recent presidential elections—with some exceptions
Cboe Volatility Index 30-day moving average in the 100 days before and after U.S. presidential elections, 1992–2020
Fund flows
Fund flow trends in election cycles: equity risk appetite decreases before elections
Average net fund flows in 4-year presidential election cycles, 1988–2023 (US$B)
Election cycle strategies
Staying fully invested has yielded the best outcome in the vast majority of election cycles
Comparing outcomes from 3 investment strategies in the 24 4-year election cycles from 1928 through 2023, as measured by the growth of a hypothetical $10,000 investment
Views from our network
August 23, 2024
Decision Economics: don't let election fears obscure your long-term goals
Elections certainly do have consequences, but for an investor, will the outcome really affect the ability to reach long-term goals? We explore why it may be worthwhile this election season to revisit principles of behavioral economics.
For more information on markets, the economy, and industry trends, check out our viewpoints, Market Intelligence, and Weekly Market Recap pages as well as our Portfolio Intelligence podcast.
Important disclosures
Past performance does not guarantee future results.
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