The 2024 United States elections are fast approaching and scheduled to be held on Tuesday, November 5, 2024. As the nation prepares to determine the next President of the United States, 34 of the 100 seats in the Senate will also be contested, as well as all 435 seats in the House of Representatives. Ahead of the election, Democrats control the majority in the closely divided Senate but will have to defend 23 seats (20 held by Democrats and 3 held by Independents who caucus with Democrats). As for the other chamber, Republicans currently hold a narrow majority in the House of Representatives (219 Republicans, 213 Democrats and 3 vacancies). History suggests a single political party generally does not control the White House and both chambers of Congress. However, irrespective of the political backdrop, the economy and the stock market have been resilient under all combinations of political parties.   

It is common for the stock market to experience increased volatility during presidential election years. Uncertainty about the outcome and potential policy changes can lead to fluctuations in stock prices. However, historically presidential election years have rewarded investors who stay the course. Market timing is just as difficult around elections as it is at any other time. Time in the market is what matters, not the president’s political party. Returns from stocks have significantly outperformed by staying fully invested rather than investing only in Republican or Democratic presidencies.  

Over the long term, the stock market tends to follow broader economic trends rather than short-term political cycles. Current issues such as the outlook for U.S. economic growth, and the timing and magnitude of Federal Reserve interest rate cuts will more likely influence market performance over politics. Furthermore, the stock market is a market of stocks. We’re focused on profitable operating companies with strong balance sheets and management teams that will have the resources to successfully navigate through political uncertainty. While each election cycle is unique, staying invested with a diversified portfolio is a proven investment strategy that achieves financial results and outweighs short-term, election-related volatility.           

Disclosures 

Past performance is no guarantee of future results.  Investing involves risk, including possible loss of principal.  Diversification may not protect against market risk or loss of principal.  The opinions expressed above should be construed as neither investment advice nor a solicitation to buy or sell securities.  Actual investor results may vary. 

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