From Morningstar: 2024-06-21 04:15:00

Ahead of the US election, Morningstar’s editorial teams are analyzing potential consequences for investors. Historical data shows that ignoring politics altogether may be beneficial, as the stock market tends to rise under every president. Democrats historically yield higher returns for investors compared to Republicans, but the original strategy of remaining invested throughout all administrations proves most profitable.

Political implications can impact investment decisions, as demonstrated by potentially drawn-out and costly litigation for Paramount Global due to uncertainty about the regulatory landscape post-election. While conventional wisdom often predicts market outcomes based on political shifts, past examples show unexpected results, challenging assumptions.

Misconceptions about the impact of politics on the stock market are debunked through various case studies, including how Apple and energy companies performed better than expected under political conditions that were projected to hinder their growth. Investors are reminded to resist reacting to market volatility driven by elections, as sensational media coverage may exaggerate short-term impacts.

The upcoming US presidential election could trigger volatility, historically resulting in higher levels of market fluctuations. Despite the potential for a stock market decline, maintaining a long-term perspective and avoiding reactionary decisions based on political events is crucial for investors. The election year may bring increased market uncertainty, which may be exacerbated by media sensationalism.



Read more at Morningstar: Is The US Election an Investing Opportunity?