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%.
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