Staying Steady Through the Midterm Elections
Every election cycle seems to bring a fresh wave of uncertainty, and the upcoming midterms are no exception. Headlines become louder, promises become bolder, forecasts become bleaker, and investors often find themselves wondering whether they should make changes to their portfolios before heading to the ballot boxes.
As we approach the midterm elections on November 3rd, it's important to remember a simple truth: markets have weathered political uncertainty many times before. Just look at this research from an August 2026 Fidelity report. While past performance never guarantees future results, we think this is a pretty powerful lesson from history.
“Since 1938, the S&P 500® almost always—95% of the time—posted price gains in the 12 months following midterm elections. Similarly, stocks have generated average returns of roughly 5% during the second year of a presidential term, though that average masks a wide variation in returns from one election cycle to the next. On average, though, those returns have jumped to 14% in the following 12 months.”
Over the decades this quote covers, investors have experienced elections involving different parties, changing administrations, economic booms, recessions, geopolitical events, and countless unexpected headlines. So the takeaway here is not that elections predict market returns; it's that investors who stay disciplined through election-year volatility have historically been rewarded.
Here in Middle Tennessee, many of the families we work with are focused on retirement, preserving wealth, supporting children/grandchildren, or navigating healthcare and long-term care decisions. Those goals don’t change based on the outcome of a single election. While policies may influence certain sectors of the economy or create short-term market volatility, a sound financial plan should be built to withstand a variety of political and economic environments. You may hear your favorite TV pundits trying to predict election outcomes and encouraging you to reposition investments accordingly, and we know that can be tempting for you (and ratings-grabbing for them). However, making hurried changes can often lead investors to miss opportunities or make decisions driven by emotion rather than strategy.
If you’re saving for the long haul, like so many of our clients are, I challenge you to not let yourself talk about the election and your retirement savings in the same breath. Instead, consider using this season as an opportunity to revisit your financial plan. Are you saving enough? Have your retirement goals changed? Is your portfolio aligned with your risk tolerance? While there’s certainly some pain when the market dips, sometimes it’s helpful to reframe it...seeing it as a time when high-quality companies go “on sale” and you get the opportunity to bolster your long-term portfolio with these stocks.
Successful investing is not about predicting the next headline, but remaining committed to a thoughtful, enduring plan no matter what happens in Washington. You’ve likely heard me share my favorite quote from financial guru Nick Murray, and find this quote particularly pertinent today: "The dominant determinant of lifetime investment outcomes is not investment performance, but investor behavior." If you need a partner to help keep you even keeled through the next few weeks and months, our team is here for you.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.