The elections are over, stocks are marching on

Investors spent most of 2024 shaking off macropolitical fears — energy, climate change, conflicts in Ukraine and the Middle East — that may have hurt market returns. Instead, the narratives driving markets have become much more focused on AI, resilient growth and lower interest rates, with seemingly little concern about who is in the White House.

From the market close on election day S&P 500 rose by 21.93% and the Nasdaq The value is up 24.88% this year, significantly better than the nearly 5% year-to-date performance in the average presidential election year since 1950. In fact, 2024 was the best 10-month run for U.S. stocks of any election year since 1936.

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But political concerns inevitably seemed more pressing as we awaited the final verdict on who would become the 47th U.S. president.

Here's the real truth: For investments it doesn't matter much.

Through COVID-19, Brexit, the Great Recession, 9/11, Black Monday, record inflation, Watergate, Vietnam and dozens of US presidents…

The stocks eventually moved up and to the right. Over time, the long-term investor is the real winner.

I find the image of long-term investment returns reassuring during stressful times in the market. Check out this one, which covers the last 50+ years (the gray bars indicate recessions):

In general, over the last five decades, investing – regardless of the starting point – has paid off. Maybe not always longer than a year. Or two. Maybe three. But over five and ten years and longer, being a buyer and holder of U.S. stocks has worked out very well.

And despite the fear, market returns didn't seem to care who was in the Oval Office. As The Financial Times Reported this week, the S&P 500 has delivered an annual total return of over 10% (the long-term investment average) in every presidential term (except one) since Jimmy Carter.

And during just one period (after George W. Bush's first election in 2000, during the bursting of the tech bubble) stocks ended lower 12 months after an election.

That doesn't mean us habit Now that we have finished casting our ballots, we are experiencing increased volatility. There are numerous business factors that will impact stocks through 2024 and beyond. And for every single company, a president's actions can be impactful.

However, there's more DC news this week: The Federal Reserve is announcing its latest interest rate policy on Thursday. After cutting interest rates by 50 basis points in September, the Fed is expected to cut its key interest rate by another 25 basis points. What happens at the Fed offices on Constitution Avenue is likely to have a far greater impact on investment returns than who ends up living on Pennsylvania Avenue.

The story continues