The anticipation building up to elections often brings with it questions about how financial markets will respond. But the outcome of an election is only one of many inputs to the market. DFA’s interactive exhibit examines market and economic data for nearly 100 years of US presidential terms and shows a consistent upward march for US equities regardless of the administration in place. This is an important lesson on the benefits of a long-term investment approach.
How US Stocks Have Behaved in an Election Month
Q3 2020 Market Review
The impressive recovery from the Spring’s Covid 19 led recession continued in Q3 amid social unrest, increasingly chaotic political theatre, and ongoing struggles to bring the pandemic under control. Economic indicators have shown extended improvement with the unemployment rate dropping to 8.4% in August, an improved labor force participation rate, rising industrial production, increasing retail sales, and strong spending on food and beverages. However, the rate of gains in many of these areas has began to wane, signaling a possible slowdown in the recovery.