How are you feeling about this year’s elections? If the thought of it makes your heart beat faster––you’re not alone. Most United States residents across party lines experience major stress around presidential elections. And recently, that stress has skyrocketed.
In 2016, about 1 in 2 people said they were stressed out and anxious about the presidential election. And by 2020, more than 2 in 3 people were feeling election stress. Why? Political hostilities and increasing divides on party lines are partly to blame. So is the uncertainty of it all.
It can be overwhelming and really exhausting not knowing how an election will shake out or if things will go the way we want. That uncertainty can invite worst-case thinking that stokes our deepest fears. And, unfortunately, all of that isn’t limited to who wins the White House. An election year can raise real concerns about market trends and our finances. In fact, about half of us are worried about how the 2024 elections will affect our portfolios.
Are those fears valid? Does a presidential election year cause market instability? And is that instability based on a Democratic or Republican win?
Here are a handful of facts about the markets in and around presidential election years:
Trend 1: Most election years see positive returns in the stock market.
Trend 2: Most positive market returns tend to appear in the 3rd year of a presidential term.
Trend 3: Average returns tend to be higher with Republican electees.
Trend 4: Republican or Democratic President, the economy continues to grow.
Trend 5: Nothing’s 100% certain.
Click here to read all of the details related to the above trends.
The bottom line is that countless factors affect elections and the markets. And it’s not just about political parties and who wins the Presidency. Current events, foreign policy, and so much more can come into play. Trying to account for it all can be dizzying. It can also get in the way of prudent choices, especially if we end up trying to time the markets or make money moves based on political preferences or predictions.
That’s why it’s important to focus on the facts—and have some simple strategies for dealing with election stress and market turbulence. To do that, you can start as simple as limiting your media intake and time on social media around elections. You can also steer clear of political talk or debates, even with those who are “on the same side” as you.
With that, it also helps to keep your eyes on the big picture and check in with the people you trust. When you do, you can get a fresh perspective and invaluable advice for weathering the next political storm or any volatility in the markets.
