Elections and the Stock Market: Much to Do About Nothing
It’s a presidential election year and with that comes the invariable stock market correlations seeking to predict election results or forecast the market’s direction. On one hand, the performance of the stock market during the two months leading up to the election has been somewhat of a predictor of who will win the race. On the other hand, we try to predict the direction of the market based on who wins the election. While all of this makes for interesting and fun banter around the water cooler, thoughtful investors would be wise to leave their Ouija boards in the closet and stay focused on their long-term investment strategy. As much as we would all like to glean even a small amount of investment insight from the election year follies, it would be important to note that the stock market is essentially non-partisan, and Presidents have very little impact on the direction of the markets.