Question 1:  Are election years good years to invest?  Surprisingly, the historical data for this is very strong.  Since the inception of the stock market, there have been 23 presidential election years. Out of those, the S&P 500 index has posted positive returns in 18 of them, or roughly 78% of the time.  What’s more, the average returns of the S&P in election years were 9%, surpassing long-term average returns.

Question 2:  Does the market perform better under Republican or Democrat leadership?  Historically, under Democrat leadership, the S&P 500 has delivered an average annual return of approximately 11.2%.  By contrast, the S&P 500 has yielded an average annual return of around 9.5% under Republican administrations.

Question 3:  Do the markets experience more instability under Democrat or Republican leadership?  Historically, under Democrats, the S&P 500 experienced an average of 2.3 recessions per term, compared to just 1.1 recessions under Republicans.

While this data is interesting it’s important to keep in mind that past performance of the market is in no way indicative of future results.  Market dynamics can vary widely from one election cycle to another.