Presidential Election and Markets

At Ocean Wealth Group we have been receiving a lot of questions regarding the 2024 Presidential election. Specifically clients are asking if they should be making changes to their long term strategy in case one candidate or the other wins.

With all the questions and commentary surrounding this upcoming election we wanted to take a look back on the last five Presidential elections. Using the S&P 500 as the baseline here is a look at the data as it relates to the most recent elections.

November 2nd, 2004 George W. Bush (Republican) defeats John Kerry (Democrat)

S&P 500 closing on November 1st, 2004 – 1,130.51

S&P 500 closing on November 4th, 2004 – 1,161.67

S&P 500 closing on November 1st, 2006 – 1,367.81

In the short term the S&P moved slightly higher. But in two years post election the S&P was up over 20%.

November 4th, 2008 Barack Obama (Democrat) defeats John McCain (Republican)

S&P 500 closing on November 3rd, 2008– 966.30

S&P 500 closing on November 6th, 2008 – 904.88

S&P 500 closing on November 3rd, 2010 – 1,197.96

This election took place in the midst of the Financial crisis. While initial volatility was to the downside the S&P ended up over 20% two years following the election.

November 6th, 2012 Barack Obama (Democrat) defeats Mitt Romney (Republican)

S&P 500 closing on November 5rd, 2012– 1417.26

S&P 500 closing on November 8th, 2012 – 1377.51

S&P 500 closing on November 5th, 2012 – 2023.57

While there was a short term decline immediately following the election after two years the S&P 500 was up over 35%.

November 8th, 2016 Donald Trump (Republican) defeats Hillary Clinton (Democrat)

S&P 500 closing on November 7th, 2016– 2,131.52

S&P 500 closing on November 10th, 2016 – 2,167.48

S&P 500 closing on November 7th, 2018 – 2,813.89

There was a small bump higher to the S&P 500 in the initial days following the 2016 election. However two years later the S&P was up by over 30%.

November 3rd, 2020 Joe Biden (Democrat) defeats Donal Trump (Republican)

S&P 500 closing on November 2nd, 2020– 3,310.24

S&P 500 closing on November 5th, 2020 – 3,443.44

S&P 500 closing on November 2nd, 2022 – 3,759.69

Initially the S&P 500 received a bit of a pop upward following the 2020 election and two years later was up close to 10%.

What the Data Tells Us

Three Democrats and two Republicans won during the last five years. In four of the five election cycles the S&P 500 has increased 20% or more in the two years following the election date. The other case saw an increase of close to 10%. The S&P 500 did not seem to care which political party came out ahead in the election.

There is going to be a lot in the news in the coming days leading up to the election.

Our view at Ocean Wealth is that if there is a long term plan in place with your money to stick with that plan regardless on how this election swings.

Over time the markets reward patience and those willing to take risk in the future of global economic advancement.