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
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.