Elections and the Markets

2024 has been a volatile year for both the markets, and US politics.

As in any election year, investors wonder what the outcome will mean for their portfolio – and “is this time different?”.

While political developments can have an impact on short-term market performance, election volatility has typically been short-lived.

An investor with time and patience on their side can position themselves for growth regardless of the outcome.

Several investment research resources whose opinions we value and respect, have shared commentary on this very topic.

Our takeaways:

Elections have, historically speaking, made no meaningful difference on long-term investment returns.
Since 1933, it has been almost an even split between Democratic and Republican presidents, and the market has trended upwards throughout.
Equities tend to look ahead and price in uncertainty. The most volatility in the 4-year cycle has historically been seen in the year leading up to the election.
Irrespective of the incumbent party and their policies, superior companies will continue to thrive by acting in their shareholders’ best interests.

SFFG Insights