Mid-term elections: What’s politics got to do with S&P 500 and Real GDP

As we head in to midterm elections on Tuesday, November 6th, I thought we’d take a look at history, the party that controls Washington and the impact it has (since 1947) on the performance of the S&P 500 (Top 500 US based stock companies) and the Real GDP. (Economic growth of the US)

As the slide shows on the top graph above, the US stock market, as represented by the S&P 500, has performed better (average annual return of 14.4%) when the Republicans control all three branches of government. But in the bottom graph, US economic growth, as represented by the Real GDP, has performed better (average GDP growth of 4.4%) when the Democrats control Washington. Note we’ve been in divided government 61% of the time since 1947 and both stock and economic growth have fared just fine.

(credit to JP Morgan Guide to the Markets 9/30/2018 for the slide)

Hope this insight is helpful and make sure to go out and vote!

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