- Midterm elections in the US are once again on the horizon. Every two years the full US House of Representatives and one-third of the Senate are up for re-election.
- There will surely be plenty of forecasts in the coming months about how a particular party’s control of congress will impact government policies and in turn the financial markets. Will markets rise? Will they fall? Who will be the winners and who will be the losers?
- Should investors make portfolio changes based on the predicted outcomes? We would certainly caution against making changes to a long-term plan in an attempt to profit (or avoid loss) from short-term changes in the political landscape.
- As seen in the exhibit below, historical data for the stock market as measured by the S&P 500 Index indicates that returns during months with a midterm election were well within the typical range of returns for all months, regardless of the election outcome.
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