Every four years we have a presidential election, and the runup to the election brings new (but really the same old) concerns: namely, “if he/she gets elected the market is going to tank big time.” The corollary, of course, is “should we get out of the market before the election in case he/she ends up getting elected? We can always get back in if he/she doesn’t win.”

I have two interesting charts related to the presidential election cycles that address these concerns. The first chart covers the period from 1961 (JFK’s administration) through 2023 (Biden’s administration).

This chart says that if you invested $10,000 at the beginning of each Republican administration your balance at the end of 2023 would be $102,293. However, if you invested the same $10,000 at the beginning of each Democrat administration your balance would be 5x greater, $500,476. So, should you invest only when a Democrat has been elected? Of course, not. Because if you just stayed invested through both Republican and Democrat administrations your balance would be another 10x greater, $5,119,520.

(NOTE: This is not a commentary on whether the differential results occur because Democrat policies are better than Republican policies for the market. Since policies don’t switch on the first day of a new administration, in fact, the Republican policies of a prior administration bleed into the next Democrat administration, and vice versa. The conclusion to draw from this chart is that you are much better off staying invested through both types of admistrations.)