BREAKING NEWS! Believe it or not, markets have performed well under both parties:
What could the market look like under a Democratic vs. Republican Presidency, depending on what happens in November?
The historical truth is that the stock market has performed well under both parties! Elections stir up emotions and headlines, yet the stock market typically shows stability irrespective of the election outcome. Here’s why you should care about elections, but also why markets typically don’t:
Consistent Market Performance:
Whether the political party in power is Democrat or Republican (or a combination of both!), markets generally have done well over time. This tells us that market fundamentals and key data points matter more than who's in power. Trying to guess market moves based on politics usually doesn't end well. Despite all the political talk, the U.S. economy has shown to be very resilient across multiple political landscapes.
Looking at Monetary Policy
Historically, it’s been monetary policy that has been amongst the most crucial factors for the markets. Monetary policy includes things such as the Federal Reserve’s policy towards interest rates and the yield curve… is the Fed tightening or loosening as a result of current economic conditions?
Conclusion:
While elections may make some investors feel uneasy, real market success depends on implementing a consistent investment strategy that is designed to fit your personal goals and objectives.