For Stocks, the Midterms May Not Matter. Here’s Why That’s A Good Thing.

Investors can find plenty to stress about as voters try to pick congressional candidates they believe will best help the nation navigate through inflation, labor shortages, a possible recession, international conflicts and divisive social issues. Here’s one bit of reassurance: If history is any guide, at least you don’t have to worry too much about the election’s impact on your stock portfolio.

Since 1939, no matter which party has gained control of Congress, the stock market has risen in the year following a midterm election, according to a US Bank analysis. And though the market’s post-midterm performance has varied widely over the years, on average, the outperformance in the modern era has been significant – especially in the first six months after election day. For the six months starting Nov. 1 of each midterm election year going back to 1962, the S&P 500 Index has returned a far-above-average 15%, US Bank found. The same periods during non-midterm years saw returns averaging just 4%.

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