President Joe Biden and President-elect Donald Trump met in the Oval Office at the White House on November 13, 2024, amid uncertainty over how the election might impact the stock market. Historically, election outcomes have shown no clear pattern in influencing market performance, as highlighted by data from Morningstar Direct. For instance, the S&P 500 soared more than 42% one year after Biden’s 2020 victory, whereas it fell about 6% following Jimmy Carter’s win against Gerald Ford, and similarly after Dwight Eisenhower’s second win. Ronald Reagan’s first year saw a modest 0.6% increase, but post-reelection, the index rose approximately 19%.
Jude Boudreaux, a certified financial planner with The Planning Center, and member of the CNBC FA Council, reiterates the unpredictability of stock movements following presidential elections, emphasizing that election years aren’t markedly different from typical years in terms of market behavior. Consequently, Boudreaux advises against making sweeping changes to investment strategies in response to Trump’s election win.
Dan Kemp, global chief investment officer at Morningstar Investment Management, echoes this sentiment. He cautions against altering portfolios based on speculative narratives amidst uncertainty, reinforcing the importance of adhering to established investment plans.
Both financial experts stress the importance of maintaining a steadfast strategy rather than reacting to potential short-term fluctuations associated with the election, highlighting a disciplined approach as crucial for investors navigating post-election market dynamics.
Original Story https://www.cnbc.com/2024/12/02/sp-500-performance-after-presidential-elections-what-to-know-.html
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