Broker Check

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

March 12, 2020

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.