Past performance is no guarantee of future results. Data excludes 2001 to 2002 due to Senator Jeffords changing parties in 2001. Calendar year performance from 1933 through 2022. Source: Strategas Research Partners, as of November 5, 2023
Dating back to America’s independence, the goal was to escape government control and become a society ran by the people/democracy. Now, almost 250 years later, two things have happened… The government has grown considerably, and the media circus is unrelenting. While this makes many of us feel uncomfortable/opinionated on how things should run. It’s a great reminder, no matter which side you’re on, the election outcome typically doesn’t have much of an effect on markets. Below are a few additional stats that back this statement up.
- Since 1950, US stocks have averaged returns of 9.1% in election years Source: Haver, FactSet, FMR. As of November 14, 2023.
-Over the past 20 elections, the S&P 500 has only been negative 12 months after the election twice. These two times, in 2000 and 2008, saw market crashes due to asset bubbles, not politics.
-A $1,000 investment in the S&P 500 made when Franklin D. Roosevelt took office would have grown to over $19 million by June 30, 2023. This period saw eight Democratic and seven Republican presidents.
-Lastly, and maybe most importantly, the market tends to be positive over the long-run no matter which party is in power. And in fact, there’s some evidence that divided government has historically correlated with stronger market returns—perhaps because government gridlock creates less policy uncertainty. There is also a lot to be said for a two party system where each side gets to take the reins for a while. The cycnic would say “long enough to not screw it up too bad”….
Moving forward, much of Trumps potential legislation will come down to the House of Representatives final tally. Today, we are seeing markets rally on the optimism of corporate tax cuts and the potential for the current tax code to stay in place past its 2026 sunset. Much of this remains to be seen and we will be keeping an eye on it. The potential policies of using tariffs as a revenue raiser has potential, but also has its own set of risks.
The risks moving forward continue to lie with interest rates and inflation. Government debt levels are unsustainable and need to be mitigated regardless of who drives the bus. Fixing that one will take economic growth and/or spending cuts which will be yet another ranting subject in the near future. While stocks are moving higher, long-term interest rates are also rising, which is causing some disruption in the bond market. The Fed and a republican majority face a tough challenge at threading the needle between being pro-growth, cutting rates, but also keeping inflation in check. All things we need to keep an eye on.
Finally, which ever side of the aisle you’re on, we remain bullish on the US of A. As always, we strongly suggest turning OFF the tv, closing out the social media screen, and keeping a balanced mindset. On the right, it probably wont be as good as one is lead to believe. On the left, its not Armageddon or time to sell the assets and buy canned food. As always, we are here for you and are open to talk at any time.
Regards,
Retirement Capital Advisors
800 Battery Ave SE The Battery, Suite 100 Atlanta, GA 30339
Office- 412-722-3795 frank@retire-me.com
Securities and Advisory Services offered through Commonwealth Financial Network®, member FINRA/ SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network
All indices are unmanaged, and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results. All references to markets, stocks, equity, small cap, mid cap, bonds, interest rates, or any other term are notional and for educational and discussion purposes only.
This material is intended for informational/educational purposes only and is theoretical. It should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Investing entails risk of loss and no guarantees are implied or suggested. Please contact your financial professional for more information specific to your situation.
| 
