October 30, 2024
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Are you wondering how the presidential election could impact your investments? This has been a common question every investment cycle since we started Evergreen Wealth Management. Our response has been consistent…elections matter but often the fundamental results of elections take years and sometimes decades to play out. Basing an investment decision on election uncertainty or results has proven to be a terrible strategy. The long-term data we review has shown that staying the course and sticking with your financial management strategy regardless of the election is a good idea. Here are the snap shots of the data that many might find interesting:
Performance of S&P 500 by Presidency
What if you only invested money during 1 political party?
If you invested only during Republican presidential years you would have averaged 2.78% a year. If only during Democrat presidential years you would have averaged 5.20%. However, if investing regardless the S&P 500 averaged 8.13% the whole time. But What About Congress?
So How Has Market Responded AFTER the Elections?
The Bottom Line
The parties occupying the White House and Legislature are just one of many variables that can affect investments. For example, the 2008 Financial Crisis created systemic risk in markets for both President Bush and Obama. Policies, regulations and accounting rules set in motion well before either administration contributed to the 2008 ‘great recession’. The most important takeaway for investors should be this…elections absolutely matter and could cause some added short term uncertainty in markets BUT making any long term investment changes around elections has not generally been an effective strategy. Staying focused on long term investing goals remains the best path for investment decisions. Evergreen Wealth will continue to navigate your plan based on data and real time policy affects not political emotion.
Please let us know if you have any other questions and we hope this helps answer any ‘election day’ questions and maybe calm any short term fears that can be created from the uncertainty elections might bring.
Disclosures
Evergreen Wealth Management, LLC is a registered investment adviser. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
The opinions expressed herein are those of the firm and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of author, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of the date indicated.
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