The 2024 election and your portfolio
Here’s a look at what’s at stake nationally in the November 5 election, analysis of historical stock market trends in election years, and portfolio considerations for long- and short-term investors.
What’s at stake—election 2024
Voters will choose a president and decide the makeup of the entire House of Representatives and about one-third of the Senate.
Important disclosures
1 Two special elections will take place concurrently with the 2024 regular Senate elections: one in California to fill the temporary vacancy created by Democrat Diane Feinstein's September 29, 2023, death and one in Nebraska, following Republican Ben Sasse’s January 8, 2023, resignation.
Who's in power now?
Republicans hold a narrow majority in the House; Democrats hold a slimmer edge in the Senate and they control the White House.
In the House
Republicans have a 217-212 majority, with six vacancies²
In the Senate
A 51–49 split, with Democrats narrowly maintaining control, owing to three independent senators who caucus with Democrats, effectively creating a majority³
2 "U.S. House of Representatives Press Gallery," pressgallery.house.gov, 5/1/24. 3 "U.S. Senate Periodical Press Gallery," periodicalpress.senate.gov, 5/1/24.
Key 2024 election dates
- January 15–June 8: state presidential primaries and caucuses
- July 15–18: Republican National Convention, Milwaukee
- August 19–22: Democratic National Convention, Chicago
- November 5: Election Day
- January 3, 2025: 119th Congress convenes
- January 20, 2025: 60th presidential inauguration
Elections and market history
Financial markets have generally shown resilience throughout four-year presidential election cycles, with changes in political party control of the White House and Congress appearing to have little discernible difference on long-term stock market performance. While election seasons can stir up strong emotions in investors and drive market volatility, trying to time the markets or make investment decisions based on perceived election trends could prove unwise versus simply investing for the long term.
Election cycles
In four-year election cycles, stock performance has typically been best in the year prior to a presidential election
S&P 500 Index performance, 1928–2023
Source: Morningstar Direct, January 2024. The S&P 500 Index tracks the performance of 500 of the largest companies in the United States. It is not possible to invest directly in an index. Past performance does not guarantee future results.
Party control
How stocks have performed under six different political scenarios
Average annual returns of the S&P 500 Index when different political parties were in power, 1928–2023 (%)
Source: Morningstar Direct, January 2024. The S&P 500 Index tracks the performance of 500 of the largest companies in the United States. It is not possible to invest directly in an index. Past performance does not guarantee future results.
Control of the White House
Stocks have risen over the long term no matter which party has been in the White House
Growth of a hypothetical $1,000 investment in the S&P 500 Index, 1/31/28–12/31/23
Source: Morningstar, 2024. A logarithmic scale has been applied to the growth of $1,000 in order to more clearly show changing values during the early decades of the 1928–2023 time span. Dates of political party control of the White House correspond with presidential inauguration months. The S&P 500 Index tracks the performance of 500 of the largest companies in the United States. It is not possible to invest directly in an index. This figure is for illustrative purposes only and does not represent any specific investment or imply any guaranteed rate of return.
Election- vs. nonelection years
Relative to nonelection years, stocks have tended to lag prior to Election Day but come back following the vote
Cumulative average returns of the S&P 500 Index during 18-month periods before and after presidential and midterm elections versus nonelection periods, 1/31/28–12/31/23 (%)
Source: Morningstar, 2024. The 18-month periods used to calculate election year cumulative average monthly returns began in January of each year of a November presidential or midterm election and ended in June of the following post-election year. The nonelection 18-month periods began in January of each nonelection year and ended in June of the following year. The S&P 500 Index tracks the performance of 500 of the largest companies in the United States. It is not possible to invest directly in an index. Past performance does not guarantee future results.
60/40 portfolios
60/40 stock-bond portfolio performance has slightly lagged in presidential election years vs. nonelection years
Annual returns of a 60/40 portfolio, 1954–2023 (%)
Source: Morningstar, 2024. The 60/40 portfolio results are based on performance of a 60% allocation to the S&P 500 Index and a 40% allocation to 10-year U.S. Treasury bonds. The S&P 500 Index tracks the performance of 500 of the largest companies in the United States. It is not possible to invest directly in an index. Past performance does not guarantee future results. This figure is for illustrative purposes only and does not represent any specific investment or imply any guaranteed rate of return.
Election volatility
Stock market volatility has been modest before and after recent presidential elections—with some exceptions
Cboe Volatility Index 30-day moving average in the 100 days before and after U.S. presidential elections, 1992–2020
Source: Cboe Exchange, Inc., 2024. The Cboe Volatility Index (VIX) tracks the performance of the market's real-time expectations of volatility over the coming 30 days. It is not possible to invest directly in an index. Past performance does not guarantee future results.
Important disclosures
Investing involves risks, including the potential loss of principal. Financial markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. The information provided does not take into account the suitability, investment objectives, financial situation, or particular needs of any specific person.
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A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange-trading suspensions and closures, and affect portfolio performance. For example, the novel coronavirus disease (COVID-19) has resulted in significant disruptions to global business activity. The impact of a health crisis and other epidemics and pandemics that may arise in the future, could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing political, social and economic risks. Any such impact could adversely affect the portfolio’s performance, resulting in losses to your investment.
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Past performance does not guarantee future results.