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S&P 500 Index Returns In U.S. Presidential Election Years

March 12, 2020
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There are many factors that impact stock market returns, but one common concern of investors is how the stock market will be impacted by a change in America’s President. In past election years, the S&P 500 Index has seen more positive performance than negative. Below I take a look at S&P 500 Index performance during presidential election years, which have historically provided positive gains for stocks.

S&P 500 Index Total Returns During Presidential Election Years (1928-2016)

 

Historical U.S. Presidential Election Results

Observations (takeaway).....

There have been 23 elections since the S&P 500 Index began. In these election years

  • 19 of the 23 years (83%) provided positive performance
  • When a Republican was in office and a Republican was elected (or reelected), the total return for the year averaged 11.9%
  • When a Republican was in office and a Democrat was elected, the total return for the year averaged -2.6%

Source: Morningstar/Ibbotson Associates.