7IM Short Thoughts: No politics, please!
Politics is a hot topic right now, with a big election year coming up around the globe.
As we get an influx of questions on this topic, we delve into whether or not a particular political party win could impact your portfolio. You might be surprised with the outcome.
I'm getting a lot more questions about politics at the moment. No surprise why, big election year coming up. Whether you're in South Korea or Taiwan, whether in Ukraine or the United Kingdom. Of course, the big daddy of them all is the United States. Every four years, we get a hype cycle, and the question is always the same. Who's going to be president and how will it affect my portfolio? Which gives me a great chance to get this chart updated.
What it shows is for each president's four-year term, the annual returns of the S&P 500, during that period, going all the way back to the 1930s. And it's a dead heat. Republicans: annual average 7.2%. Democrats: annual average 7.2%. So, what will politics do to my portfolio? The answer I always give is ”For markets, it just doesn't matter that much”.
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