IN honesty, I’ve never known a year go so quickly… and 2024 will be here before we know it.

Without doubt, it’s going to be a big year for politics - and not just for the UK, where an election is widely expected to take place.

There are leadership votes in some key international hotspots – Taiwan, Russia and Ukraine, in particular.

India is gearing up for the largest democratic process in the world next April/May, when more than one billion people will be eligible to vote.

Separately, the EU Parliamentary elections will take place in the summer.

Last, but by no means least, the US will take to the voting booths next November.

With all of this in motion, I know from experience that people will start asking the following question: “If x/y win, how will it affect my portfolio?”

The question is often loaded with pre-conceived ideas, depending on political allegiance and occasionally, emotion.

To save getting into the trenches on this, I think data is a better route to take to form an answer - and leading investment management company 7iM has helpfully provided me with some excellent stats, which I wanted to ensure that you're briefed about.

I’ve picked the US out of the list of luminaries.

It’s the biggest economy in the world.

There’s lots of data, and the election cycle is a nice, fixed four years, meaning we can look at the annualised return of the US market for each four-year period (identified by the President who started, even if they didn’t finish).

Here’s one of those pre-conceived ideas we were talking about.

It’s often assumed that a Republican government is more “market-friendly” than a Democratic government.  

But does this tally? 

 

Source: FactSet/7IM. Data shows average annual return for S&P 500 for the 4 years from 31^st July of first year in office (to avoid the election noise).

No. Almost unbelievably, the average annualised return for each party’s period in power is the same: 7.2% pa.

So the answer to the question is this: “In a purely portfolio sense, politics just doesn’t really matter that much…”

I genuinely hope that this insight is useful. As ever, don’t hesitate to get in touch with me or one of my colleagues here at Future Life Wealth Management if we can ever be of assistance.