With so much anxiety and concern regarding the upcoming election, investors are more worried than ever about what will happen with the stock market depending on which side wins. As the media can be very sensationalist, the truth is often hard to find. History shows us, however, that there is very little correlation between political party and long-term market performance. While political candidates from opposing parties may have difficulties in getting along, the markets have performed very well regardless of which political party has been in power. Going back to the first presidential election in 1789, the difference between the two political parties is .2%, with Republican administrations posting 8.8% gains and Democrat administrations posting 8.6% gains.1 If we focus on more modern stock market performance with the inception of the S&P in 1926, the average annual return for a Democrat administration is 14.94% per year, while the average annual return for a Republican administration is 9.12% per year. While there is a significant difference revealed in those numbers, performance is fairly even if you factor out Hoover’s -27.19% during the Great Depression. 2 All things considered, market performance has not historically discriminated along party lines.
1 https://www.fidelity.com/learning-center/trading-investing/markets-sectors/stock-returns-and-elections
2 https://www.mcleanam.com/are-republicans-or-democrats-better-for-the-stock-market/