Stocks Don’t Care Much About Politics

The U.S. is in an election year, and in for a long summer/fall of rhetoric from both sides of the aisle regarding the dangers of the opposing party.
From a market perspective, political noise or the party in power really does not matter much to the long-term outlook for stocks.
Regulations, tax policy, government spending, etc. can matter on the fringes and to specific industries but the fact is that equities are biased upward over time with bouts of volatility.
Various presidential terms going back to WWII (see chart) have seen positive S&P 500 performance to varying degrees with few exceptions.
It’s also interesting to note that most periods have seen meaningful drawdowns, represented in the chart by the gray circles, as would be expected for risk assets.

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