What Stocks Do After Elections

You’re going to see more versions of “If X wins the election tomorrow, here’s what stocks will do” over the next 24 hours than you can shake a stick at.

Try as hard as you can to ignore it all. History makes one thing clear: There is little correlation between elections and stock performance — particularly in the short run.

Here’s how the inflation-adjusted S&P 500 (INDEX: ^GSPC) has performed six months and one year after the last 17 presidents took office (keep in mind: Johnson and Ford became presidents without direct elections):

To read the full article from Morgan Housel follow the link: What Stock Do After Elections

So keep in mind this week that:

  • You should want to own good businesses.
  • You should want to hold them for a long time.
  • You should want to buy them at great prices.
  • None of those three should be materially influenced by who wins the election.

In other words, buy companies — not politics.

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  1. Zach Boyle says:

    So wouldn’t that mean value companies (and as a result, stocks) would do well?