What History Tells Us about US Presidential Elections & the Market

Growth of $100 in Fama/French Total US Market Research Index
March 4, 1929 — June 30, 2020

Do Blue or Red Make Green?
It’s natural for investors to look for a connection between who wins the White House and which way stocks will go. But as nearly a century of returns shows, stocks have trended upward across administrations from both parties.

Shareholders are investing in companies, not a political party. And companies focus on serving their customers and growing their businesses, regardless of who is in the White House.

US presidents may have an impact on market returns, but so do hundreds, if not thousands, of other factors—the actions of foreign leaders, a global pandemic, interest rate changes, rising and falling oil prices, and technological advances, to name a few.

What About the Senate?
The anticipation building up to elections often brings with it questions about how financial markets will respond. But the outcome of an election is only one of many inputs to the market.

For a much more thorough breakdown of the markets and how the senate makeup is for each president, be sure to click the image above. It is loaded with detailed information that shows the intricacies of the relationship between the US government and the total market.

Stocks have rewarded disciplined investors for decades, through Democratic and Republican presidencies. It’s an important lesson on the benefits of long-term investment approach