What matters and what does not? We stated in our Q3 2018 review that over the long term politics do not matter for equity returns. Remember that fact as we head into US mid-term elections. Who wins and who loses will not effect the long term equity market results.
In every year after the US mid-term elections the S&P 500 has been positive since 1947. What does that mean? Don’t confuse causation and correlation. This does not mean that positive market returns are guaranteed next year. It does mean that politics or political swings are not causal for stock market performance.
Please do not let your optimism or pessimism about any political climate cloud your judgement. Only look at facts as they present themselves. There was a study published by the National Bureau of Economic Research that posited that Republicans shifted more towards equity markets after the 2016 elections while Democrats shifted to fixed income and cash. We do not put this forward for gloating or shame. This is just a teaching tool. Examine the biases that go into your investing decisions. Ask if those are helpful or harmful. If they are not actual economic inputs they are most likely harmful to your long term success.