Election Politics and the Stock Market

By: Dustin Barr, CFA

This presidential election cycle promises to be one of the most bitterly contested campaigns in our lifetime.  Voter frustration, as measured by low approval ratings for the candidates and Congress, is at or near historic levels.

Elections matter.  However, it is important to note that companies have succeeded in making money even when they dislike certain policies.  While investors are struggling to determine the impact that a Clinton or Trump presidency would have on our country and financial markets, the economy and markets have proven resilient under Democrat and Republican leadership.

Source:  J.P. Morgan Asset Management.

* Stock market returns are price returns and don’t include dividends.  Average annual returns are calculated using year-end to year-end numbers for the S&P 500.  During the calendar year of 2001 the Senate changed party control 3 times.  It is counted as being under Democratic Party control for the entire year because Democrats held the chamber for most of the year.