Josh Giacalone, Corporate Sustainability Analyst
jgiacalone@haverfordquality.com
The 2024 election cycle has had no shortage of surprises. With Election Day still more than 15 weeks away, the news that President Biden has withdrawn from the race may not be the last shock voters will contend with before casting their ballots in November. But despite the perpetual media frenzies and ongoing political uncertainty, investors would be wise to remember that markets do not exhibit political bias.
For nearly seven decades, stocks have performed well regardless of who occupies the White House. The S&P 500’s median return, for example, has exceeded 9% under both Democratic and Republican administrations.1
Data as of 7-3-24
Further, letting politics get in the way of investing comes at a great cost. A recent analysis showed that those who only stayed invested under Democrat or Republican administrations earned 90-98% less than those who stayed fully invested from 1961-2023.2
The above chart shows what a hypothetical portfolio value would be if an investor invested $10,000 in a portfolio that tracks the Ibbotson U.S. Large Stock Index on 1/1/1961 under three different scenarios. The first two scenarios are what would occur if an investor only invested when one particular party was president. The third scenario is what would occur if an investor had stayed invested throughout the entire period. Returns include reinvestment of dividends and interest. The example is hypothetical and provided for illustrative purposes only. It is not intended to represent a specific investment product. Indexes are unmanaged, do not incur management fees, costs, and expenses and cannot be invested indirectly. Past performance is no guarantee of future results.
Whether history repeats itself or merely rhymes, we believe it is clear that investors’ best course is to focus on what market returns can be, unburdened by what media headlines have been.
