Election 2024: Politics and Your Portfolio
Who wins the White House matters — but only at the margins when it comes to your investment portfolio.


The U.S. presidential election has gripped the nation. Should it take hold of your portfolio, too? The short answer: No.
Financial fundamentals such as the direction of interest rates and corporate earnings hold more sway, especially over the long term. But it doesn’t hurt to be aware of what history tells us about elections and financial markets and to consider how potential policy moves could impact your investments.
Predicting election outcomes is more art than science, and at this writing, we don’t yet know who will move into the White House in January. One clue will come from the market itself. If the S&P 500 index moves higher in the three months leading up to the election, the incumbent party tends to win; the opposite is true when the benchmark is down. This simple indicator has been on target in 20 of the past 24 elections, according to LPL Financial.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Best scenarios for your portfolio
In late summer, the race for president was a toss-up between Donald Trump and Kamala Harris; the odds were in favor of Republican control of the Senate and a Democratic House of Representatives.
Going back to 1945, the best scenario for stocks has been a Democratic president and a split Congress, says Sam Stovall, chief investment strategist at CFRA Research. That configuration has resulted in average calendar-year price gains for the S&P 500 of 16%, compared with an average annual gain of 9.2% over the entire period.
The second-best scenario has been a Democratic president and a unified Republican Congress, with average gains of 13%, followed by a Republican sweep, with average gains of 12.9%. This time, “gridlock is likely,” write strategists at BofA Global Research. “Historically, legislative stagnancy has fostered equanimity in the stock market,” they add.
How policy moves can impact portfolios
Of the big themes investors are watching, including global trade and immigration, “the market is most worried about changes in the corporate tax rate,” says Shannon Saccocia, chief investment officer of Neuberger Berman Private Wealth. Harris has talked about raising the rate to 28%, up from 21%; Trump has floated lowering it to 15% for U.S. manufacturers.
More: A Look at Donald Trump's Tax Plans Ahead of the Election
More: A Look at Kamala Harris's Tax Plans Ahead of the Election
A change would impact small stocks the most, says Saccocia. Unlike giant multinational firms, with global sources of income and access to a number of deductions, “small, domestically oriented companies pay the full ride. For them, the corporate tax lever is really important.”
Sector-wise, the Republican policy platform favors energy, financials, industrials and materials, according to investment strategists at BCA Research. Harris’s agenda would benefit consumer discretionary and industrial stocks but put regulatory pressure on financials and technology, although BCA believes that a split or opposing Congress would constrain a Democratic wish list.
More: 5 Stocks to Buy for a Harris Presidency
More: 5 Stocks to Buy for a Trump Presidency
Even in a contentious election season, there are areas of agreement. “Bipartisan themes around infrastructure and growing U.S. manufacturing should benefit ‘old economy’ sectors like industrials, materials and energy,” according to BofA.
Leading up to the election, expect more volatility. That argues for a near-term tilt toward defensive sectors such as health care and utilities. And keep politics in perspective as just one of many factors that could impact your investment strategy.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage, authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.
-
The Role of the U.S. Dollar in Retirement: Is It Secure?
Protect your retirement from de-dollarization, because “capital always goes where it is treated best."
By Adam Shell
-
Retire in France for Beauty and Culture
France offers a great history and a slower pace of life for retirees. At times, it can feel like stepping into a postcard.
By Brian O'Connell
-
To Stay on Track for Retirement, Consider Doing This
Writing down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
By Matt Green, Investment Adviser Representative
-
How to Make Changing Interest Rates Work for Your Retirement
Higher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
By Phil Cooper
-
When to Sell Your Stock
Knowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
By Charles Lewis Sizemore, CFA
-
Within Five Years of Retirement? Five Things to Do Now
If you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
By Evan T. Beach, CFP®, AWMA®
-
The Home Stretch: Seven Essential Steps for Pre-Retirees
The decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
By Mike Dullaghan, AIF®
-
Stock Market Today: Great Power Affairs Mesmerize Markets
The U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
By David Dittman
-
Three Options for Retirees With Concentrated Stock Positions
If a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
By Evan T. Beach, CFP®, AWMA®
-
Four Reasons It May Be Time to Shop for New Insurance
You may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS