ELECTION 2024: POLITICS AND YOUR PORTFOLIO

Who wins the White House matters—but only at the margins when it comes to your investments.

- ANNE KATES SMITH

THE U.S. presidential election has gripped the nation. Should it take hold of your portfolio, too? The short answer: no. Financial fundamentals such as the direction of interest rates and corporate earnings hold more sway, especially over the long term. But it doesn’t hurt to be aware of what history tells us about elections and financial markets and to consider how potential policy moves could impact your investments.

Predicting election outcomes is more art than science, and at this writing, we don’t yet know who will move into the White House in January. One clue will come from the market itself. If the S&P 500 index moves higher in the three months leading up to the election, the incumbent party tends to win; the opposite is true when the benchmark is down. This simple indicator has been on target in 20 of the past 24 elections, according to LPL Financial.