What does the election mean for the stock market?

5. Investors should focus on fundamentals and stick with their plans.

No matter which side of the aisle investors sit on, this election cycle is likely to bring emotional ups and downs. And it can be tempting to put your money where your convictions are—whether you feel optimistic or pessimistic about November 2024.

Historically, however, financial markets have largely been unbothered by both presidential and midterm elections, and trying to adjust your investment strategy in the hopes of capitalizing on an anticipated post-election swing in the markets could end up backfiring on you. “If you’re an investor, I would suggest that this shouldn’t be something you focus on,” says Chisholm.

Market moves are more likely to be driven by market and economic fundamentals, such as corporate earnings, interest rates, and other economic factors. “While political headlines may at times cause short-term ripples in the market, long-term, for stocks, bonds, and other investments, returns seem to be driven much more by the fundamentals of the underlying asset classes,” says Malwal. As such, Strategic Advisers, LLC, is more focused on economic fundamentals, such as the stage of the US business cycle, the level and direction of interest rates, the job market, and business activity.

And rather than trying to predict near-term political or market cycles, most investors would be better served by adopting a thoughtful long-term financial plan that’s suited to their needs, and sticking with it. “We believe such a plan should be based on an investor’s goals, their risk tolerance, and other considerations regarding their specific situation as an investor or as a family,” says Malwal. “But we don’t believe market history supports factoring in election cycles when managing long-term investments.”

Or as Jurrien Timmer, Fidelity’s director of global macro, puts it, “Elections tend to have less impact on the markets than politicians may like to believe.”