Updated: Jan 12, 2021
Many clients are asking what the presidential election means to their investment portfolio. While the headlines about the upcoming election can spark uncertainty for the future of the economy and markets, the following video from Dimensional Fund Advisors can provide perspective for investors.
What does history tell us about elections and the market?
The historical record indicates how financial markets have responded for nearly 100 years across administrations from both parties, as illustrated in this chart from Dimensional Fund Advisors. (Click chart for more details & to link to the interactive graph detailing each the market performance history of each administration or view full report below).
GROWTH OF $100
FAMA/FRENCH TOTAL US MARKET RESEARCH INDEX
March 4, 1929-June 30, 2020
In summary, there are a variety of factors which impact the performance of the stock market, including presidential elections. However, we do not recommend making a predication about how the presidential election may turn out and using that information to adjust your portfolio. If we know anything about the stock market, it can constantly surprise investors and the Covid-19 crisis we have all faced this year is a prime example.
See full report here: