Does the party occupying the White House affect the U.S. stock markets and other economic measurements? How does the party controlling Congress affect markets?
While it’s interesting to review history and try to answer those questions, before we draw any conclusions, we should at least acknowledge that “past performance is no guarantee of future results.” And that is especially true this year as COVID-19 has thrown the 2020 election into uncharted territory.
In a period of about six months, the U.S. markets went from bull market to bear market, back to bull market. Or said another way, we went from historical market highs to a recession to a recovery in six months.
Yet while those bull and bear-market labels are valid, the reality is that with COVID still impacting our lives, many might still feel as if we’re in a downturn, especially with unemployment still so high.
The fact is that both Democratic and Republican presidents have served during flat, falling, and rising markets. Also, we need to remember that there is generally a lag of a year or two before a president’s policies affect growth and by that time, the mid-term elections come into play too.
Of course, remember that while a president’s influence is large, it’s still limited. Congress, world economies, foreign governments, military affairs, the Federal Reserve, and many other factors outside of a president’s control influence the stock market and the economy. Again: past performance is no guarantee of future results.
While the current political environment may still seem suspenseful, it’s important to understand that you can still maintain your personal resources, investments, and plan for your future. As we come up on the last two months of the year, please be sure to reach out to our team with any questions you have during this time.
Simonet Financial Group, LLC
Phone: (512) 296-8962