As we approach the end of 2024, investors are keeping a close eye on the stock market’s performance following the presidential election. While history shows that stocks tend to rise after a presidential election, investors should also brace themselves for some short-term market volatility.
According to CNBC data, the S&P 500, the Dow, and the Nasdaq Composite have all experienced gains between Election Day and year-end in presidential election years dating back to 1980. However, investors should not expect a smooth upward trajectory in the days immediately following the election.
In fact, all three indexes have historically seen declines in the sessions and weeks following the voting days, only to recover most or all of those losses within a month. This means investors should not anticipate an immediate market surge in the days following the election.
The uncertainty around the outcome of the election, which is expected to be a close race, may delay final results for both the presidential race and close Congressional contests. This uncertainty can prolong market volatility as investors wait for clarity on which party will control Congress.
Despite the potential for short-term fluctuations, 2024 has been a strong year for stocks, with the broader market reaching all-time highs. According to Bespoke Investment Group, the first 10 months of 2024 have seen the best performance in a presidential election year since 1936, with gains of approximately 20%.
As we navigate the post-election market landscape, it’s essential for investors to stay informed, remain patient, and focus on long-term financial goals. Stay tuned to Extreme Investor Network for expert insights and analysis on how to navigate the evolving market conditions following the presidential election.