Episode 65 – What Factors Affect the Stock Market in an Election Year

This episode of the Money Pig Podcast covers a range of topics including Social Security sustainability, GDP growth concerns, the McDonald’s Economy concept, stock market performance during election years, interest rates impact on investments, policy expectations and market volatility, and the importance of long-term investment strategies. Justin Pitcock, CFP® professional, emphasized the need to focus on long-term financial goals over short-term political outcomes and reminded listeners of personalized financial advisory services offered by Goodwin Investment Advisory.

Justin recently shared this update below with our clients on how the markets are doing the first half of 2024 as well as focuing on stock market perforrmance during elections years.

The US equity market posted very strong results for the first half of the year, exceeding most expectations with gains of over 15 percent, while bond markets remained flat to negative. Despite some investor nervousness surrounding the upcoming election, historical data suggests that US presidential elections do not significantly impact the market. Markets generally focus more on economic trends and interest rates rather than election outcomes.

The US economy continues to grow above expectations despite inflationary pressures. The Federal Reserve has signaled plans to lower interest rates later this year and continue cuts into next year. These factors are more significant for market performance than the election results. Therefore, we anticipate above-average returns for both equity and bond markets in the second half of the year. Historically, the 3rd and 4th quarters have shown strong performance during election years since 1926. Also, please remember that “The Market” already has a good feel for both candidates and has posted good returns under both presidencies. We will adjust our investment strategy in response to changes in the geopolitical environment if need be.

If you want an expert who can give sound advice and help you navigate how to invest your wealth best and plan for your retirement, reach out to us to schedule a quick call. One of our CFP® professional wealth advisors would love to discuss your individual goals and options with you. The first step in our process is to schedule a free 15-minute intro call with our Goodwin Investment Advisory consultant here.