IT’S THAT TIME OF YEAR – FOR AN ELECTION!

election-day

WHO DOES WALL STREET WANT TO WIN?

Did you know that your portfolio
doesn’t care who wins the White
House this November? That’s right.
While as individuals, WE care about
the outcome because it affects our
ideals. However, the result of the
election from a *historical research
standpoint teaches us that we are just
as likely to experience positive market
performance over the 12 months
following an election without regard to
which candidate wins.

What is even more interesting is that
if we go back to 1928 we learn that
the parties that control the individual
branches of government have a bigger
impact on market performance than
simply considering the Presidency on
its own.

In the two years following an election,
the S&P 500 index gained 16.9%,
on average, when one party controls
the White House and both houses
of Congress; 15.6% when one party
controls both houses of Congress
and the other party owns the White
House; and just 5.5% when the House
and Senate are divided. But a divided
Congress doesn’t always lead to sub-par
returns. In the two-year periods
following the 2010 and 2012 elections,
the S&P 500 rose 19% and 42%,
respectively.

You may feel strongly about one
party over another when it comes to
your personal situation, but when
considering your portfolio, history
teaches us that it doesn’t really matter
much who wins the White House.

The better indicator for your portfolio
is the status of our economy before
and after the election and the trajectory
of our Country’s GDP. If we’re in a
recession and spending has slowed
down, we’ll see a significant drop in the
stock market. However, if our GDP is
growing, then we should see an overall
positive stock market – no matter who’s
in office.

So get out there and vote for who you
think will do the best job and don’t
worry about your portfolio.

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