Bulls & Bears ≠
Donkeys & Elephants
Key Takeaways
Election results haven’t reliably predicted stock market returns.
Markets have grown under Republican, Democratic, and divided control of Congress.
Trying to time the market around elections can be more costly than simply staying invested.
Your financial plan was built for uncertainty, including changes in Washington.
The Long View
Since 1926, stocks have grown whether Republicans controlled Congress, Democrats did, or control was mixed. Each stretch had good years and bad ones, and none stood out for better returns. Which party wins an election simply hasn’t told investors much about where markets go next.
The calendar isn’t a great guide either. Midterm years have historically been among the weaker years of the four-year presidential cycle, but there’s a lot of variation. In midterm years when stocks rose strongly heading into the election, markets kept rising the following year. We don’t take that as a forecast. We take it as a reminder that patterns like these are easy to find and hard to invest in.
What History Actually Shows
Hypothetical growth of $1 invested in the S&P 500, January 1926 to October 2026
Markets Move First
Markets are very good at pricing in what people expect. By the time a poll is published, investors have already priced it in. Results are often a surprise, and even if you guess the winner, you’d still need to guess how markets will react.
Over the long run, returns come from companies earning profits and adapting to the rules they’re given. They’ve done that under every combination of leadership. Interest rates, inflation, and the health of the economy matter far more than any single race, and we watch those most closely.
Elections themselves rarely hurt portfolios. Decisions made around them sometimes do. Moving to cash can feel safe, but it means getting two decisions right, when to get out and when to get back in. Most people find the second one much harder.
The cost of guessing wrong adds up quickly. The best stretches often come right after the worst moments, when stepping aside is most tempting.
Missing the Best Days
Russell 3000 Index Total Return, 2001-2025
But if you missed the best...
But if you missed the best...
No Reason to Rush
Election season looks a lot like any other time for us. We’re watching your allocation. If markets move sharply, we’ll rebalance back to your targets and look for tax-loss harvesting opportunities where they make sense.
We’re also watching policy, not polls. Elections don’t change tax law on their own. If new laws affecting taxes, retirement accounts, or estate planning do pass, we’ll let you know what they mean for your plan.
A few things to do in the meantime.
If you have a large expense in the next year or two, keep it in cash or short-term bonds, not stocks.
You don’t need to watch the results come in to make good decisions.
If something is weighing on you, call us. That’s what we’re here for.
Let your financial plan do its job. Markets have grown with either party in power, through divided government, and through plenty of elections that felt like turning points at the time.
We can’t control how an election turns out, but what we can control is staying disciplined, and that has always mattered most.
Disclosures
All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. The content on this blog is for informational and educational purposes only and should not be construed as personalized financial advice, tax advice, legal advice, an offer or solicitation to buy or sell any security, or a recommendation to pursue any specific investment strategy. The information provided is general in nature and may not be suitable for your individual circumstances.
Olio Financial Planning, LLC (“OLIO”) is a registered investment adviser with the United States Securities and Exchange Commission, domiciled in Virginia. Investment advisory services are only provided to investors who become OLIO clients under a written agreement. Past performance does not guarantee future results, and all investments involve risk, including the potential loss of principal.
Nothing contained herein should be interpreted as a guarantee of any specific outcome. Forward-looking statements or projections are based on assumptions and current market conditions, which are subject to change without notice. Actual results may differ materially.
You should consult your own financial, legal, tax, or other professional advisors before making any financial decisions. OLIO does not guarantee that the information presented is current, accurate, or complete, and assumes no responsibility for any errors or omissions.