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Regardless of which party controls the Senate and/or House of Representatives after the midterm elections, investors may stand to benefit. The third year of a president’s term has historically been the strongest—often by a wide margin. This could be because presidents do everything in their power to stimulate the economy as they prepare to run for re-election.

 

The Third Year of a Presidential Term Has Historically Been the Strongest for Markets—By Far

S&P 500 Index average annual returns for each year of a 4-year presidential term since 1950

Past performance does not guarantee future results. The Index is unmanaged and not available for direct investment. For illustrative purposes only. Returns are calculated beginning on Inauguration Day. Data Source: Morningstar, 8/22. 

 

There’s another reason why 2023 could be a good year for the stock market: The year after midterm elections has delivered stronger performance than other years regardless of the election outcome.

 

Stock Performance After Midterm Elections Has Been Nearly Double Other Years

S&P 500 Index returns one year after midterm elections since 1950

Average one-year returns (1950-2021)

After midterm elections = 15.14%

All other years = 7.14%

Past performance does not guarantee future results. The Index is unmanaged and not available for direct investment. For illustrative purposes only. Returns are calculated beginning on Election Day. Data Source: Morningstar, 8/22. 

A financial professional can help you build a diversified portfolio that’s right for you based on your goals.

 

S&P 500 Index is a market capitalization-weighted price index composed of 500 widely held common stocks.

Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit or protect against a loss.

This material is provided for educational purposes only.

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