Elections and the Stock Market

With the election season upon us, now is a good time to review the impact that elections can have on the stock market. Unfortunately, it’s not so easy to boil down election results and make highly confident predictions about what will happen in the ensuing years.

It would be convenient to identify a straightforward explanation for market outcomes, but doing so is simply unrealistic, as markets are a melting pot of many different factors with constantly changing impacts. For example, which is more important, the person who is president or stock market price-to-earnings multiples? What about the direction of interest rates? Inflation? Unemployment? Strength or weakness of the economy? The list of factors that influence market performance goes on and on.

Of course, who is in the White House and Congress impacts a myriad of regulations, tax laws, and government programs, but to make investment decisions based on the outcome (or expected outcome) of a single election can be dangerous.

That said, it can be informative to look back in time and see how markets have performed under different political environments. JP Morgan did just this by reviewing the calendar year results of the S&P 500 from 1937–2019 and categorizing these annual returns based on which party controlled the White House and Congress. Let’s see how the S&P 500 performed under several different scenarios:

A Sample of Market Returns: 1937 – 20191

The good news from these results, if we can safely draw conclusions, is the majority of combinations that have occurred have resulted in positive investment performance. And isn’t that what is most important?

To get very technical with these sets of results would require looking at the full range of returns during all the time periods studied and doing additional statistical analysis. Even then, is this truly a cause and effect relationship? Do the results really provide us anything predictive?

Many investors (from both sides of the aisle) seem to fear that the stock market will perform poorly following the November 3rd elections. But given the historical election results and subsequent stock market performance, it would appear that investors would do well to disregard the upcoming election when it comes to reviewing their portfolios. They should instead focus on what they do know — their own situation and wealth management objectives — and make sure their portfolios have an appropriate mix of investments to meet their long-term needs and risk tolerance.

If you’d like any help in that pursuit or a customized portfolio analysis prior to Election Day, we invite you to connect with our team. Our goal is to make you feel more confident about the road ahead, whatever that brings.

[1] Source: Standard & Poor’s, U.S. House of Representatives, U.S. Senate, White House, J.P. Morgan Asset Management. Stock market returns are total returns and include dividends. Average annual returns are calculated using year-end to year-end S&P 500 levels. Data are as of September 25, 2020.


This article contains general information that is not suitable for everyone. The information contained herein should not be constructed as personalized investment advice. Reading or utilizing this information does not create an advisory relationship. An advisory relationship can be established only after the following two events have been completed (1) our thorough review with you of all the relevant facts pertaining to a potential engagement; and (2) the execution of a Client Advisory Agreement. There is no guarantee that the views and opinions expressed in this article will come to pass.

Strategic Wealth Partners (‘SWP’) is an SEC registered investment advisor with its principal place of business in the State of Illinois. The brochure is limited to the dissemination of general information pertaining to its investment advisory services, views on the market, and investment philosophy. Any subsequent, direct communication by SWP with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of SWP, please contact SWP or refer to the Investment Advisor Public Disclosure website (http://www.adviserinfo.sec.gov).

For additional information about SWP, including fees and services, send for our disclosure brochure and Client Relationship Summary as set forth on Form ADV from SWP using the contact information herein. Please read the disclosure brochure carefully before you invest or send money (http://www.stratwealth.com/legal).

Is It Still A Good Time For You To Invest?
People often ask me, “is now the right time to get into the market?” If I had a crystal ball that told me when to buy and when to sell, I probably would not be writing this piece! With the highest inflation numbers since the 1980s, concerns about an economy potentially in recession, and the most prolonged downturn in stocks since the Great Financial Crisis, there is no question that investors have been challenged this year. The good news is that there are always opportunities for long-term investors with the right plan. Whether you are an experienced investor, have recently come into cash, or are new to the financial markets, below I discuss some things to consider when asking if now is the right time to invest.
Read More
Retiring in a Volatile Market
This week has been another extremely turbulent one in the stock market. While it is never comforting to see large, red numbers, volatility can be even more uncomfortable for recent retirees or those considering retirement. A colleague of mine recently told me that he has seen more of his clients retire in the last two years than in his first ten years of working at SWP. This got me thinking a lot about the notion of retirement. Retirement is a huge life event and adding volatile markets can compound the feeling of uncertainty. In this article, I will share some of the concepts we have been discussing with our clients.
Read More
Strategic Wealth Partners Ranked In Milwaukee Business Journal’s Investment Management Firms List
Strategic Wealth Partners is proud to be listed in the Milwaukee Business Journal’s Investment Management Firms ranking. The list is ranked by firm assets under management from December 31, 2021. “We are so pleased to be included in this list of the largest investment advisors in the Milwaukee area. We first entered the Milwaukee market in 2018 because we saw tremendous potential to combine forces with some outstanding professionals,” says Principal and Co-Founder Neal Price. “Kathy Klein, Joe Thompson, and the entire Milwaukee team are best-in-class. We are excited to expand our presence and become the go-to firm for comprehensive wealth management services in the Milwaukee area.” “Our success comes from a solid and loyal client base who believes in our personalized solutions. Our work on behalf of our clients is far-reaching, but it all comes down to our unique process that is client focused, manages complexity, delivers simplicity, and guides our clients to their goals,” states Wealth Advisor Kathy Klein. Strategic Wealth Partners is an independently managed wealth management firm that has been partnering with clients since 2008 in Deerfield, IL, and since 2018 in Milwaukee, WI. For more information on services, please visit www.stratwealth.com.
Read More