The 2024 Elections and Your Bottom Line

During election years, particularly presidential election cycles, results traditionally start to come into focus after Labor Day. This is when many American voters become more engaged with the electoral process and begin considering the potential outcomes. With this in mind, I’ll often get the question: “Setting politics aside, which candidate will be best for my bottom line?”

It’s a fair question, but would you believe me if I told you that there may not be much of a difference?

The chart below shows the stock market’s historical performance since 1933 broken down by the controlling parties of the President, Senate, and House of Representatives. The highest average annual returns have come in cycles when one party is in the Executive Branch while the other party controls one or both bodies of Congress. While these findings may be interesting, it’s important to remember that past performance does not guarantee future results.¹

What is the reasoning behind these correlations? Perhaps the Federal Government works best when a diverse group of ideas comes together and is able to reach a compromise, or maybe Wall Street has just learned how to better adapt to what takes place in Washington.

Many Americans are passionate about the outcome of our country’s presidential elections, but the stakes go beyond just the White House. There are 34 Senate seats, 435 seats in the House, and a wide variety of state and local issues on the ballot in 2024. Our citizens’ right to vote is one of the pillars that this country was founded upon, so I am sure many of you are paying close attention to these races as you prepare to make choices about our nation’s future.

With every financial strategy that we help develop, we consider both major and minor political events, and help our clients prepare for periods of increased volatility. As a result, no matter the outcome, we encourage you to remain focused on your personal investing goals and try to avoid overreacting to short-term market volatility that we may encounter.

If you would like to revisit your financial strategy this election season or have questions about how your portfolio may be affected, please don’t hesitate to reach out to your advisor. I will also be hosting an investing webinar with Concord’s CIO, Gary Aiken, on October 22 where we will discuss the current state of the economy, compare each presidential candidate’s proposed economic plans, and offer insights on what the future might hold for investors. All are welcome! Click here to register.

¹BairdWealth.com, 2024. For the period 1933 to 2023, excluding 2001-2002 due to Senator Jeffords changing parties mid-2001.