Markets have been up for the 12-month period following every correction in midterm election years since 1950. That’s because markets like certainty, independent of party.
In the run-up to midterms, though, uncertainty increases and markets tend to experience corrections and higher volatility. For example, the S&P 500 Index has historically experienced corrections in the run-up to midterm elections. Yet, following the election, the S&P 500 Index has historically performed well.
Our guidance: Investors shouldn’t look through the news headlines and instead focus on the strong fundamentals as they adhere to their long-term investment plans.