A little perspective on markets and elections

Whatever our political views, the ability to vote and have a voice in the future of our country is one of the things that makes America special. I hope everyone takes the opportunity to participate.

Elections also bring plenty of headlines and sometimes questions about the market. I wanted to share two charts from Vanguard that offer some useful historical perspective.

Volatility before midterms is not unusual

Vanguard found that market volatility averaged 14.7% in midterm years, compared with 12.5% in other years. Volatility has often been elevated in the months leading up to the election.

Markets have historically moved higher afterward

In Vanguard’s analysis of 17 midterm elections from 1958 to 2022, the S&P 500 was higher one year after every election. The path was not always smooth, and past results do not guarantee what happens next.

Our focus remains on what matters most for investors: a disciplined approach, a diversified portfolio, and a financial plan built around your long term goals. Election results are important, but they are only one of many factors that influence markets.