Investors rarely have trouble finding something to worry about. Today, three issues in particular are getting a lot of attention: rising interest rates, the national debt, and the upcoming midterm elections.
Interest rates are rising.
The 10-year Treasury yield has climbed above 5%, mortgage rates are back above 7%, and the Federal Reserve recently raised rates. Those numbers can certainly sound concerning. But history offers some useful perspective. Since 1982, average S&P 500 returns following Fed rate hikes have actually been higher than returns following Fed rate cuts across each of the periods measured, from six months through four years.[i]
The national debt has surpassed $40 trillion.
As discussed last month, the growing debt is a legitimate long-term concern. But a concern for the country isn’t necessarily an investment signal. Investment firm, Dimensional, looked across developed markets from 1975–2022 and found government debt levels showed little relationship with stock market returns.[ii]
The midterm elections.
Who wins may be very important to you personally, but political outcomes haven’t historically been a reliable predictor of market returns. Markets have generated strong average returns under unified government, a unified Congress with an opposing president, and a split Congress, irrespective of party in power. [iii]
And there’s another interesting historical pattern: since 1970, markets, on average, have rallied after midterm elections as the uncertainty surrounding the election fades. [iv]
Interest rates, debt, and elections are very different concerns. In each case, however, the investment implications may not be as straightforward as the headlines make them seem.
As always, we should allow our investment plan to guide our investment decisions, not the headline or concern of the day.
©Behavioral Finance Network
[i] Source: Charlie Bilello. This Week in Charts 09/21/2026.
[ii] Source: Dimensional Fund Advisors. Country Debt & Stock Returns. Nov 28, 2023.
[iii] Source: Capital Group. Guide to Midterm Elections, 2026.
[iv] BlackRock, Fall 2026 Investment Directions: AI, Politics, & Portfolios, August 2026.
