US elections - market effect

Previous market returns based on US president.



(Source: Athene Insights)

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Past results cannot guarantee future returns.

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To be honest I think election is a small blip, virus impact on economy the bigger issue.

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Commenting on the first part about historical party returns:
Those market returns under different parties are a bit misleading as they imply that a Democratic candidate would be better for the US stock market than a Republican on average. But that is a statistical fallacy as this should be interpreted that equity risk premiums are higher during terms of Democrats, that is because a Democratic government is more likely to be elected when large uncertainty (for example economic crisis) is prevalent.

So it seems that during β€˜normal times’ more pro-market candidates seem to be elected while during more uncertain times more social candidates seem to be elected. That overlaps that higher risk premiums follow from the uncertain times leading to a higher average market return during their terms. So the implication from that data is just incorrect, democrats aren’t inherently better for the stock market than Republicans (or vice versa). The data is just presented in a bit of a bad way.

This is explained further in the following paper:

Hope I provided some food for thought for some people who might misinterpret that first piece of data :wink:

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All I am hoping for is one of them (whoever is elected) slips up about the Economy is going to the wall so that Panicking US Investors do a massive sell off and us Brits go in like D-Day and liberate the NASDAQ.

US tech taking a bit of a pounding today it seems, most big tech stocks down 5%+ currently