What to Expect before, during, and after November 3rd, 2020
The purpose of this article is to try to identify trends and discuss how the market has performed during election seasons.
The chart below represents a one year time frame of the S&P 500 (large caps) during an election year from 1988 to 2016. The dotted line at 45 weeks represents when the presidential election takes place.
The chart below is the same chart as above, but using the Russell 2000 (small caps) in lieu of the S&P 500.
Summarizing the graphs above, small cap companies have generally outperformed large cap companies during election years.
Our data also shows that since 1980, small cap companies have out-performed large cap companies in the first year after elections (illustrated below).
Large Cap Performance
|S&P 500 Price Change||All years 1980-2015||Campaign Year||First Year of Term|
Small Cap Performance
The chart below depicts the 3 month performance prior to and the 12 months performance after the election of the S&P 500 for each election year since 1996.
To further analyze this trend, we broke down the performance of each sector of the S&P 500 from 2001-2017 to determine which sectors performed best and worst following an election year.
Things to Consider:
● Small cap companies have underperformed large cap companies this year despite historical trends
● Small cap companies have historically outperformed during a low interest rate environment
● Since 2001, consumer discretionary has been the top performing sector following an election
● Since 2001, telecom has been the worst performing sector following an election.
To request a full copy of our pre and post election findings, please email us at
Content for this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is based on historical values and does not guarantee future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that the strategies promoted will be successful.