With news headlines constantly covering every aspect of the presidential race, you may be wondering how the 2024 election may impact you and your finances. After all, every four years, uncertainty about the next president and their economic policies can lead to more uncertainty in the minds of investors.
The long and short of it is, you may care passionately about who wins, but your investment portfolio probably doesn’t.
As this chart shows, while the stock market has fluctuated under the leadership of both parties, the S&P 500 has trended higher over the long term, no matter who’s in office. The trend suggests that the stock market's performance may have more to do with the overall strength and resiliency of the U.S. economy rather than the person who sits in the Oval Office.¹
● Long-Term Trend: Historical data shows that the stock market has generally trended higher over time, regardless of which party holds the presidency.
● Company Growth: Many successful companies were founded and flourished under various administrations, contributing to overall economic strength.
● Market Priorities: Factors like earnings growth, economic trends, and technological innovations typically influence the market more than political shifts.
● Investor Focus: Remember, when you invest in the stock market, you're investing based on your time horizon, risk tolerance, and specific goals—not specific political outcomes.
The most important takeaway: Elections often create some short-term uncertainty, so it’s best to prepare for some volatility over the next few months. But don’t allow unexpected price swings to influence your overall approach.
Thanks to FMG for the information in this post.
Stocks are measured by the Standard & Poor's 500 Composite Index, an unmanaged index considered representative of the overall U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. Stock price returns and principal values will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost.
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