Impact Of Mid-term Elections On Your Investment Portfolio

By now, you've probably had enough of talking head political pundits weighing the odds of Republicans taking control of the Senate.

And if you live in a swing state, you've no doubt heard candidates droning on about why the future direction of the country is hanging in the balance in this year's mid-term U.S. election.

Post-election pop

What does this mean for investors?

Let's cut to the chase: It doesn't really matter if Harry Reid or Mitch McConnell runs the Senate.

While making investing decisions based on past market behavior is always risky, history shows that stocks usually head up in the 12 months following a mid-term election regardless of which political party prevails.

[Related -Indexes At Record Highs Following Economic Data Announcements]

Sam Stovall, equity strategist at S&P Capital IQ, has crunched the numbers, going back to 1946 and the results are illuminating.

According his research, the S&P 500 Index has gained 15.3% on average the first six months after a midterm election.

 

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