The Midterms and Your Portfolio

Democrats are widely expected to win the House in this year’s midterm elections, and are favored at this point to win control of the Senate as well. What should these elections mean for your portfolio? Not much. First, markets have likely already priced in expected election results and their potential impact. Second, historically speaking, it would generally have been unwise to let politics drive your portfolio, as markets have tended to rise over time, whether the President was a Democrat or Republican. Macrotrends has a chart that can show the Dow Jones Industrial Average for Presidents all the way back to Harding:

We only went back 50 years, through the Ford Administration. The DJIA rose, often by large percentages, for every Administration except for two—the Carter Administration, under which the DJIA’s return was marginally negative, and the George W. Bush Administration, which was hit by the Financial Crisis during the last 18 months of his term. CNBC also has a chart that characterizes market returns based on Presidential and Congressional control:

While divided government has slightly outperformed single-party control, we would shy away from drawing robust conclusions based on small samples. The simplest takeaway from this graph is that markets have tended to rise no matter what combination of Democrats and Republicans maintained Congressional or Executive control.

JMS Capital Group Wealth Services LLC

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This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument or investment strategy. This material has been prepared for informational purposes only, and is not intended to be or interpreted as a recommendation. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice.