Nearly a century of US stock market returns suggests that making investment decisions based on control of the chambers of Congress is unlikely to lead to better investment outcomes.
- From 1926 to 2022, stocks trended higher regardless of whether Democrats or Republicans controlled the House and the Senate, or whether control was mixed.
- Actions by Congress and the other branches of the federal government may mpact returns, but other factors like geopolitical events, interest rate changes, and technological advances do too.
- Decades of research suggest that current market prices incorporate all of this information.
- Shareholders invest in companies, not a political party, and companies focus on serving their customers and growing their businesses, regardless of what happens in Washington.
Stocks tend to reward disciplined investors no matter who has the upper hand in the House and Senate—a useful lesson about the benefits 1926 of a long-term investment approach.
*Material from third-parties, including Dimensional Fund Advisors (DFA), shared here should not be construed as a recommendation of that firm’s products or services. They are for educational purposes only.
Past performance is no guarantee of future results. Actual returns may be lower. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful. Indices are not available for direct investment. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment.
In US dollars. S&P data © 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.
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