Harris or Trump? It doesn’t matter for investors

By Grant Pearson & Monik Kotecha

‘As it draws closer to the big day, media and financial commentators will go into overdrive tempting investors to pre-position their investments for a red or a blue team win,’ said Insync’s Head of Strategy and Distribution, Grant Pearson. ‘Politicians themselves will likely use fear and temptation to try to influence perceptions of how their actions, or those of their nemesis, might impact investment markets.’

But the evidence, as captured below, suggests investment returns will be similar when looking beyond immediate market reactions, regardless of the outcome of the election.

‘If we look at every US election result since President Roosevelt, and how markets actually behaved across each term, we can see that who wins and who loses the presidential race makes little difference to returns at all,’ Mr Pearson said.

Across the last 35 presidencies, Republicans presided over the most negative and most damaging investment return periods. They had 4 negative return rates, compared to 2 for the Democrats.

‘These six presidential terms, however, total a mere 17% of all government terms since before World War II,’ Mr Pearson said.

Positive terms amounted to about the same in number and magnitude, no matter which party won, and so too were the worst falls.

Insync’s Chief Investment Officer, Monik Kotecha, said there are times where a particular sector of the market may be favoured, or not, by a certain presidency.

‘We last witnessed that with Trump in 2016.  Aspects of the healthcare industry, for example, were negatively impacted for a short time by Trump’s unsuccessful attempt to repeal the Affordable Care Act,’ Mr Kotecha said. ‘While overall, politics don’t dictate broad market outcomes, the 2024 election does present the widest range of policy and investment outcomes I've seen in my 33 years of market observation.’