We are 11 months away from another US election. And this major event prompts many questions for investors in the US and worldwide.
Should the party in power change my investment strategy? If a Republican wins, should I increase my stock market holdings? Investors love a good narrative to form an investment decision.
But, it still begs the question, does the party in power show a consistent trend to how markets will perform.
The below mentioned slide illustrates the performance of the S&P500 Index from January 1926 to the end of 2022, as well as the serving president for their term.
As you’ll notice on the chart, there is no discernible pattern between the party in power and the performance of the market. There are periods in every president’s term where the market went up and down. Volatility did not discriminate whether the president was a Republican or Democrat.
The simple conclusion to take away from this chart is this: do not adjust your investment strategy in advance of a US election. As an investor, you are entitled to participate in the long-term growth of the market. It does not matter if there is a US election, the seasons are changing, or if there is a full moon. I kid, but the last two events have just as arbitrary an effect on the market as a US election.
