Press Release (ePRNews.com) - CENTRAL LONDON, England - Nov 01, 2016 - Fisher Investments Europe released a new infographic showing the impact of US presidential election years on US market returns. The infographic illustrates average S&P 500 returns during each US presidency dating back to 1929.
The current US presidential candidates may speak of doom and gloom, but here’s a historical fact investors can find some comfort in: US stock market returns are typically positive during US election years — 82% of the time, on average.
This pattern exists because US presidents typically lose relative power at US mid-term elections and legislative risk aversion is usually much higher in the second half of their terms as a result. US Presidents know this and push for more major legislation in the front half when their power is likely to be greater. Stock markets generally dislike broad, sweeping legislation as it introduces uncertainty for investors. New legislation typically results in redistribution of money, property rights or regulatory changes. Research shows people hate losses much more than they like gains, so when the likelihood of legislation is higher, overall risk aversion rises — muting returns.
Which party wins the White House also has an impact on US market returns. When a Democrat wins the US presidential election, average S&P 500 Index returns are often lower in the election year and higher in the inaugural year, 7.4% and 16.2% respectively. When a Republican is elected, average S&P 500 returns initially soar on pro-business rhetoric then taper off the following year, 15.5% and 0.7% respectively. However, this is an unusual US election with an outsider as the Republican nominee, pitted against a well-known Democratic nominee, so the trend may not apply — a factor Fisher Investments Europe will continue weighing as the US election nears.
To full view the infographic, please visit: http://www.fisherinvestments.co.uk/financial-market/us-el….
Investing in stock markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The figures above are presented in terms of US dollars. The value of investments and the income from them will fluctuate with world stock markets and international currency exchange rates. Commentary provided constitutes the general views of Fisher Investments Europe and should not be regarded as personal investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein.
About Fisher Investments Europe:
Established in 2000, Fisher Investments Europe is a wholly-owned subsidiary of Fisher Investments, marketing Fisher Investments’ wealth management services to individuals and families in the United Kingdom and providing wealth management services to individuals and families in continental Europe. For individuals and clients in continental Europe, Fisher Investments Europe delegates day-to-day portfolio management to Fisher Investments. Founded in 1979 by Ken Fisher, Fisher Investments is an independent, fee-only investment adviser with $71 billion under management (as of 30/9/2016). The clients of Fisher Investments and its affiliates include over 150 large institutions and over 35,000 high net-worth individuals. For more information, visit www.fisherinvestments.co.uk. Source :
Fisher Investments Europe