Dear Client,
With last week’s midterm elections behind us, many investors are wondering what comes next for markets. History offers a surprisingly consistent answer. Since 1950, the S&P 500 has posted positive returns six and twelve months after every midterm election, a record of 19 out of 19. Twelve-month gains ranged from about 3% to more than 30%, and the pattern held under presidents of both parties. One possible explanation is that elections create uncertainty, and markets tend to respond favorably once the results are known and some of that uncertainty fades.
A perfect record is encouraging, but it is not a promise. Nineteen elections represent a small sample, and each unfolded in a different economic environment, with different interest rates and market challenges. The broader lesson is that markets have historically looked beyond election results rather than react to them, even when the headlines feel loud. This is why our RiskFirst® approach does not reposition portfolios based on election outcomes. Instead, we focus on the underlying drivers of risk and return over time, allowing a disciplined investment process, rather than the political calendar, to guide our decisions.
Vote of Confidence
Stocks Have Risen After Every Midterm Since 1950
Regards,
Shrier Associates LLC
Disclosure: This piece is for informational purposes only and contains opinions that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no representation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Past performance is not indicative of future results. Any indices shown are not available for investing. If there is discussion of any specific strategy, it is not intended as a guarantee of profit or loss. If objectives are mentioned, there is no guarantee that it will be achieved. RiskFirst® is a registered trademark of Redwood Investment Management, LLC.
Objectives mentioned are not guaranteed to be achieved. Associates LLC is a state registered investment adviser. Such registration does not imply that the adviser as reached a certain level of skill or ability and no inference to the contrary should be made. Please see firm’s Form ADV Part 2A (Brochure) for more information on investment risks and strategies. Redwood and Shrier Associates LLC are not affiliated entities. Consumer Price Index (CPI) measures the overall change in consumer prices based on a representative basket of goods and services over time.
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