2020 U.S. election impacts

Historically, presidential election cycles can influence stock prices over the near-term. COVID-19 infection rates, vaccine developments, policy proposals from President-elect Biden and the makeup of Congress could have implications for the economy, taxation and stock market longer-term. The Ameriprise Investment Research Group provides balanced, strategic insights that can help you put current conditions into perspective within a long-term investment portfolio.

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Ways to position your portfolio in Q4 amid the election

Investors should anticipate periods of market volatility leading up to and after the U.S presidential election. Our roadmap from the Ameriprise Investment Research Group provides insights on key election points, longer-term investment themes and portfolio implications to consider based on election results.

Investor's roadmap to the 2020 election

Strategic investor insights for presidential election cycles

In an effort to identify discernable market patterns, much attention has been paid over the years to the so-called presidential cycle of average annual stock market returns. Read our summary of historical election-cycle market performance and stock-price volatility. We also highlight trends for the U.S. economy, deficit spending and market performance during various political cycles.

Committee Perspectives: U.S. election guide

Evaluating Biden's plan for America

Former Vice President Joe Biden's campaign team released several tax and spending proposals. Together, they supply a detailed picture of the policy direction he would take. This report from the Ameriprise Investment Research Group provides a summary of Biden’s proposals and outlines several potential investment implications.

Election Insight: Evaluating Biden's plan for America

Election year market volatility

Market volatility tends to rise in the fall during both election years and non-election years. However, election years tend to have higher volatility in the spring as voters participate in primaries, and there are often a number of candidates running for office. Interestingly volatility in election years tends to be lower in the summer, as the presidential field typically narrows.

Sources: Bloomberg, Standard and Poor’s. S&P 30 day volatility during election years based on calendar month. Data as of 03/31/2020, beginning in 1946. Past performance does not guarantee future results.

 

Market volatility resources

If you have concerns during periods of market volatility, call your advisor. He or she knows you and the details of your portfolio best. Together, you can determine what, if any, action you need to take.

This information is being provided only as a general source of information and is not intended to be the primary basis for investment decisions. It should not be construed as advice designed to meet the needs of an individual investor. Please seek the advice of a financial advisor regarding your financial concerns.
The S&P 500 Index is a basket of 500 stocks that are considered to be widely held. The S&P 500 index is weighted by market value (shares outstanding times share price), and its performance is thought to be representative of the stock market as a whole. The S&P 500 index was created in 1957 although it has been extrapolated backwards to several decades earlier for performance comparison purposes. This index provides a broad snapshot of the overall US equity market. Over 70% of all US equity value is tracked by the S&P 500. Inclusion in the index is determined by Standard & Poor’s and is based upon their market size, liquidity, and sector.
An index is a statistical composite that is not managed. It is not possible to invest directly in an index.   
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