In the latest episode of the Morris Financial Concepts podcast, we’re joined by Bart Valley to explore the complex relationship between presidential elections and the stock market. As the 2024 election season unfolds, many investors and financial advisors are seeking guidance on how to navigate market volatility and make informed decisions. Valley shares historical data and expert insights to shed light on this timely topic.

Key Takeaways:

• Historical data shows that most election years and months haven’t produced extreme returns in the stock market.
• The winning political party has not been a reliable indicator of stock market performance.
• The S&P 500 has delivered positive returns in 19 out of the past 23 presidential terms.
• Presidents have limited direct power to impact the wider economy and stock market.
• Markets tend to react to uncertainty around elections but typically settle once the outcome is known.

As Valley explains, “If you go back and look at the S&P 500, which we can accept as the broad market measure in the US, it’s produced positive returns in 19 of the past 23 presidential terms.” This data-driven perspective helps to quell financial advisors’ and investors’ fears about the stock market’s resilience during election cycles.

Valley also highlights the common misconception that presidents wield significant control over the economy: “The president doesn’t sit in the Oval Office and run the economy… The president can affect some things directly, namely in regards to markets, regulatory policies, and trade policies… But typically those are things where an industry or sector might be impacted.”

For investors and financial advisors feeling unsettled by election-related market volatility, Valley offers this sage advice: “Vote with your ballot and not your savings… Don’t make any changes to your well-thought-out plan just in an attempt to profit or avoid losses from changes in the political landscape.”

The full podcast episode provides a wealth of information to help investors and financial advisors maintain a long-term perspective and avoid reactive decision-making. To gain further insights from Bart Valley and the Morris Financial Concepts team, we invite you to watch the complete video on our YouTube channel and subscribe for ongoing expert guidance. Follow us on social media to stay informed about future podcast episodes and to access valuable resources to support your financial journey.