Discussing Historical Market Date on the Mid-Term Election Years
August 23, 2022
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Jake Sanders, and I am a partner at Wealth E&P and operate as a Wealth Advisor and Certified Financial Planner.
I wanted to revisit a topic that is worth discussing today; if you came to our Economic Update Dinners, either in Alpharetta or Cartersville, you've already seen this information. As you know, we're in a midterm election cycle. We're all about to start seeing some more political ads in the weeks and months to come!
What does this mean for the markets? Above is a chart that gives us some information on that. What you'll see in the orange on the bottom is the average intra-year decline on the S&P 500 going back to 1950. This number is pretty phenomenal in my opinion. That average decline is almost down 16%. We've already touched down 23% this year, though we're not there right now, so we'll only add to that once this election cycle is over.
What is more phenomenal, in my opinion, is what was represented by the blue. You'll see the 12-month returns following the midterm election, so November to November, and that average is 19%. In other words, the S&P 500 has averaged 19% on the upside going back to 1950 and midterm election cycles. Now, will this happen again? We don't know. There are obviously a lot of other things contributing to that. One of the things that is contributing to that on the positive side is the lack of uncertainty politically. Of course, here at Wealth E&P, we will monitor that and make adjustments as needed.
If you want to find out more about how we do that, if you have additional questions, or if you want to even see our Economic Update video, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our next Market Minute! We appreciate you and hope you have a great rest of the week!
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.