Midterm Elections - What Do They Mean for Your Wealth?

With the midterm elections today, we want to offer a simple reminder: we are not making changes to your portfolio based on the outcome of any election.

That is intentional.

Our investment philosophy is built around long-term goals, broad diversification, keeping costs low, and avoiding attempts to time the market. Election results are important and can feel significant in the moment, but history has not shown a reliable pattern between which party controls Congress and how the stock market performs.

The study below looked at nearly a century of market history and found no reliable pattern linking long-term stock market returns to which political party controlled Congress. Markets have experienced periods of both growth and decline under Democratic, Republican, and divided control, but over time, stocks have continued to reward long-term investors regardless of the party in power. This reinforces why we believe investment decisions should be driven by long-term goals and harnessing the power of the market, rather than election outcomes.

That does not mean elections are unimportant. It simply means they have not provided investors with a reliable signal for when to buy, sell, or change course.

So, while the headlines may be noisy, our approach remains the same: stay diversified, stay disciplined, and keep the focus on the long term.

If you’d like to learn more, we encourage you to read Dimensional Fund Advisors’ article by following this link. Happy reading!