How Does the Market Perform During Election Years?

Feb 22, 2024 | Market Minute, Market Updates

The S&P 500 has historically done well during election years despite concerns about market volatility. Watch our latest Market Minute as GreenUp’s Chief Investment Officer Daniel Greulich, CFA®, CFP® emphasizes the importance of long-term fundamentals over short-term uncertainties.

Hello, my name is Daniel Greulich, and I’m the Chief Investment Officer at GreenUp Wealth Management. As we stand on the cusp of another presidential election year, I’m reminded of the unique position we find ourselves in as investors and as citizens. It’s a moment that invites speculation, analysis, and quite often, a bit of worry about the future of our markets.

However, my message to you today is one of calm assurance and perspective. Historically, the anticipation surrounding election outcomes tends to stoke fears of market volatility or drastic shifts in policy that could upset our investment strategies. Yet the data presents a compelling narrative that we cannot ignore.

On average during presidential election years, the S&P 500 has returned approximately 11%. Compare this to non-election years where the return average is around 15.6%. While that’s a noticeable difference, it’s crucial to recognize that even in election years, the market’s performance remains robust, delivering average to above-average results.

This pattern underscores a fundamental truth about our financial markets and the broader political landscape. Despite the heated rhetoric and the high stakes, the reality is that the implementation of presidential policy is a slow-moving process, often hindered by complexities and checks of our bureaucratic system.

What this means for us as investors is that the immediate impact of an election on the market is generally overstated. Our investment philosophy has always been guided by long-term fundamentals rather than short-term uncertainties. The resilience of the market, even in times of political transition, reaffirms our strategy of focusing on solid, value-driven investment decisions over reactionary moves spurred by the election cycle.

As we navigate this election year, it can be difficult to remain agnostic on issues important to us. At GreenUp Wealth, we will not be swayed by the ebb and flow of political tides, but remain steadfast in our commitment to a disciplined, informed approach to investing. Together we will continue to build and preserve wealth regardless of the political landscape.

Thanks, and have a great day.

Author

  • Daniel Greulich, CFA, CFP®

    Chief Investment Officer | Wealth Advisor | Ann Arbor, MI -- Daniel leads our Investment Committee and partners with Aaron Kirsch, Chief Client Advocacy Officer to design and implement client portfolios with your advisor. Daniel brings 14 years of practical experience as a trader, financial advisor, and money manager at both large and mid-sized financial services companies to GreenUp Wealth Management. In addition, he holds a CFP® designation and is also a CFA charterholder. This combination of experience and knowledge helps Dan confidently guide his clients through the development, execution and monitoring of their customized financial plans.

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