It is hard to believe we are in the midst of yet another election cycle. With inflation soaring, economic growth slowing, and extremely choppy markets, midterm elections seem like an afterthought. But on Tuesday, November 8th, 435 House of Representatives (House) seats and 35 of the 100 Senate seats will be contested.
Unfortunately, as market participants have already experienced this year, markets usually underperform in the 12 months preceding midterm elections. However, while investors may worry about the differences between candidates and their potential impact on equity returns, stocks have been positive in the last 15 elections regardless of which political party reigns supreme on election day.
This informative white paper, “Midterm Elections and Equity Market Performance,” provides an interesting historical perspective on how the markets have responded during election years. We hope it provides some insight into the complex relationship between politics and the markets! Give us a call if you have questions or would like to set up a time to meet.