How do political flashpoints impact stock market performance?
In terms of political turmoil, the 60’s and 70’s can be considered analogous to today. For example, in 1968 the USA was involved in the Vietnam war, Martin Luther King was assassinated, and there was a great deal of protests and even violent demonstrates as frustrations boiled over. And yes, 1968 even featured a flu pandemic.
As we celebrate another chapter of American democracy, we thought to examine past moves in the markets following contentious and jarring events in the United States. This video includes a chart that shows the percentage change in the S&P 500 index from 30 trading-days before a major event to 250 trading-days after.
Events can move stock market prices, but how the markets react is unpredictable and not necessarily tied to an event.
We’ve looked at the data and no pattern holds 100% of the time. What we believe, is that over time markets will move higher, as has historically been the case. The most important thing an investor can consider is how long they can stay invested, and what kind of volatility they are comfortable experiencing.