In this video I’d like to offer another investment consideration during an election season...
Do keep historical context in mind: Making investment decisions with a broader context, instead of a single data point, is best practice. Therefore, understanding history is imperative when it comes to structuring a sensible portfolio.
In that vein, we can look at market experience since 1945. The best case for stocks has been a Democratic president and a split Congress. In that scenario, the S&P 500 rose approximately 16% annually. In the second-best historical result, which had a Democratic president and Republican House and Senate, the market has returned approximately 13% annually. The third best scenario is a Republican sweep, where the S&P 500 has experienced just under a 13% annual return.
Viewers can come to their own conclusions based on these data. However, in my opinion, the most important statistic is this: Since the end of World War II, the S&P 500 has returned over 11.30% per year when including dividends. I try to emphasize to my clients that if they stick with their strategy over the long-term, and remain overweight in stocks, they will likely be happy with the results regardless of who is in the White House.