Ready for the long holiday weekend? The origins of Presidents Day can be traced back to the early 1800s when the nation gathered to celebrate one of the most important figures in American history, George Washington. While Washington’s birthday is now commonly referred to as Presidents Day, there was never a proclamation to officially change the name of this federal holiday. Today, the nation celebrates all presidents, past and present − regardless of how revered they are/were by the nation. And speaking about revered presidents, over 70% of voters would prefer there not be a 2020 redux in 2024 − which is surprising as a rematch appears to be in the offing. While we are still in the early stages leading up to the 2024 election, here’s what we are keeping an eye on:
Bottom line | History suggests that investors should not re-position their portfolios simply based on the fact it is an election year. While election years bring uncertainty, in the long term, fundamentals, such as economic and earnings growth, monetary policy, interest rates and inflation, have a more meaningful impact on future returns than which party is in power in Washington. Examining the markets since 1937, the S&P 500 has experienced 21 negative years − 11 coming under a Republican president and 10 occurring under a Democrat president. Similarly, when looking at GDP growth, 7 negative years have occurred under both a Republican and Democrat president. The point is, the market and the economy have historically gone up regardless of which party is in power, so we would suggest not making knee-jerk decisions based off the winner of the election.
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