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Market Returns After Midterm Elections

November 04, 2022
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Much attention is being paid to the upcoming midterm elections and the potential impact on market returns. While election results will likely impact the market, contrary to popular belief the market cares less about who wins each contest than eliminating the unknown. In other words, having the contest decided is more important than who wins the contest.

The following graphic from our strategic partners at Russell Investments illustrates an interesting point. Since 1934, the 12-month period following mid-term elections has always resulted in positive market returns – regardless of which party prevails. Perhaps more interesting is that the average return for that 12-month period has been 11%.  

Past performance is no guarantee of future results. While there is no assurance that a diversified portfolio will produce better returns than an undiversified portfolio, and it does not assure against market loss, a diversified portfolio can reduce a portfolio’s volatility and potential loss. All investments are subject to risk, including the risk of principal loss.

The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Past performance is no guarantee of future results. No person or system can predict the market. There is no guarantee that any strategies discussed will result in a positive outcome. All investing involves risk and no investment strategy can guarantee a profit or protect against loss, including the potential loss of principal. S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market. The NASDAQ is an index that tracks the cumulative results on a market capitalization basis of all stocks trading in the NASDAQ system. The Dow Jones Industrial Average is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets. Investors cannot invest directly in an index. Diversification does not guarantee a profit or protect against a loss.