For Stocks, the Midterms May Not Matter. Here's Why That's A Good Thing.

The good news is, no matter who wins control of Congress, stocks typically enjoy a nice gain.

roll of "I voted" stickers on American flag
(Image credit: Getty Images)

Investors can find plenty to stress about as voters try to pick congressional candidates they believe will best help the nation navigate through inflation, labor shortages, a possible recession, international conflicts and divisive social issues. Here's one bit of reassurance: If history is any guide, at least you don't have to worry too much about the election's impact on your stock portfolio.

Since 1939, no matter which party has gained control of Congress, the stock market has risen in the year following a midterm election, according to a US Bank analysis. And though the market's post-midterm performance has varied widely over the years, on average, the outperformance in the modern era has been significant – especially in the first six months after election day. For the six months starting Nov. 1 of each midterm election year going back to 1962, the S&P 500 Index has returned a far-above-average 15%, US Bank found. The same periods during non-midterm years saw returns averaging just 4%.

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Kim Clark
Senior Associate Editor, Kiplinger's Personal Finance

Kim Clark is a veteran financial journalist who has worked at Fortune, U.S News & World Report and Money magazines. She was part of a team that won a Gerald Loeb award for coverage of elder finances, and she won the Education Writers Association's top magazine investigative prize for exposing insurance agents who used false claims about college financial aid to sell policies. As a Kiplinger Fellow at Ohio State University, she studied delivery of digital news and information. Most recently, she worked as a deputy director of the Education Writers Association, leading the training of higher education journalists around the country. She is also a prize-winning gardener, and in her spare time, picks up litter.