🔬 The Stock Market Post-Election

7 Charts That Break-Down The Market Following The Election

If the stock market is normally a roller coaster, during election years it becomes a roller coaster designed by someone who just discovered energy drinks. And it shows in the numbers - since 1979, election years have delivered returns that are about as impressive as a participation trophy (+5.8%), while non-election years flex with a much more robust +11.8%.

Turns out politics and profits mix about as well as oil and water!

What is pretty clear, however, is that regardless of who wins, the stock market typically continues its march higher - independent of the political party in power.

In fact, the average return for any given presidential terms since 1979 is quite impressive at +45%, with only two negative terms:

• 2000 to 2004: Less about politics and more to do with the market finding out that sticking ‘.com’ to your company name didn’t magically make it profitable.

• 2004 to 2008: A decent run right up until the Great Financial Crisis.

This of course means that President George W. Bush holds the distinction of being the only president in 45 years to have a term in office where the stock market went down - and he did it twice!

Looking more at what the immediate future may bring, it’s interesting to note that the 12 months following the election actually yields a pretty positive return: +13%.

And only twice since the 1980 election of Ronald Reagan has the market been down a year out from the election.

Although, when looked at by political party the Dems have actually faired much better here: Averaging +22% vs. the Republicans at +6%.

Regardless of who wins, investors should expect the markets to continue to be volatile over the coming months.

For example, since 1990 the CBOE’s Volatility Index AKA ‘The Vix’ has averaged around 23.7 in November in election years - a full 23% higher than in non-election years.

The VIX is basically the market's mood ring - and during elections, it's giving off serious 'teenage angst' vibes.

Regardless, this election cycle has me burnt out so I’ll be glad when it’s over!

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