Election 2024: Harris concedes to Trump; Dow sets new record high

Donald Trump has defeated Kamala Harris to win the 2024 presidential election, becoming just the second president in history to serve two nonconsecutive terms. While this historic victory brings inevitable questions about market implications, our analysis of decades of historical data reveals a reassuring truth: successful investing transcends political cycles. Since World War II, the S&P 500 has averaged an annual gain of 11.2% during years when Democrats controlled the White House and 6.9% under Republicans, yet the most important lesson isn't about party affiliation—it's about staying invested regardless of who's in office.

The 2024 election delivered several historic firsts that will shape our political landscape for years to come. At 78, Trump becomes the oldest person ever to win a U.S. presidential election and the first president since Grover Cleveland in 1892 to serve two nonconsecutive terms.

Markets responded positively to the election results, with the Dow jumping more than 3% and closing at a new record high. Republicans also regained control of the Senate, giving the party significant influence over legislative priorities moving forward.

Trump's policy platform centers on several key areas that could influence different market sectors. His administration plans to fully extend the signature tax cuts from his first term, which could benefit corporate earnings and consumer spending. On trade, he's proposed implementing substantial tariffs on foreign goods, particularly from China, which mainstream economists warn could raise consumer prices but may benefit certain domestic industries.

The energy sector is likely to see significant policy shifts, with Trump promising to "drill, baby, drill" and roll back environmental regulations that were expanded under the Biden administration. This could benefit traditional energy companies while potentially challenging renewable energy investments. Additionally, his administration plans major changes to immigration policy and has signaled intentions to reduce government spending in certain areas while increasing defense expenditures.

Financial services may benefit from promised deregulation, while healthcare policy could see shifts that affect different segments of that industry. These policies will undoubtedly influence various market sectors differently, but history teaches us to look beyond individual policy proposals when making investment decisions.

If you're feeling anxious about what this election means for your financial future, you're not alone. A recent survey found that 61% of investors believe presidential elections have a direct, immediate, and lasting impact on stock market performance. However, this perception doesn't align with historical reality.

Here's what the data actually shows us: The stock market has rewarded long-term investors regardless of which party controls the White House. Since 1929, only three presidents have experienced negative returns for the S&P 500 on an annualized basis over their full terms, and the average annualized return across all presidencies is over 9.5%.

While it's true that Democratic presidents have historically overseen higher average stock returns (8.4% annually) compared to Republicans (2.7% annually), this statistic can be misleading. Much of this difference stems from just two major events: the dot-com boom and bust, and the 2008 financial crisis followed by the subsequent recovery. These were largely economic cycles that happened to occur during specific administrations rather than direct results of presidential policies.

The real factors that drive long-term market performance are:

Think about it this way: The stock market was down in only three of the 16 presidential election years since 1960, while it experienced negative returns in seven of the 16 non-presidential election years. This suggests that election timing has little correlation with market performance.

What should you do now? Absolutely nothing different with your long-term investment strategy. A portfolio that remained 100% invested in stocks regardless of presidential party would have significantly outperformed most strategies that tried to time the market based on political outcomes.

Here's your action plan:

The most successful investors throughout history have been those who remained disciplined during uncertain times. The actual factors that influence stock performance over the long term are company earnings, profit margins, innovations, and the business cycle—not which political party occupies the White House.

As we've seen countless times before, markets adapt to new political realities and continue their long-term upward trajectory. The S&P 500 has returned 2,080% over the last three decades including dividends, equivalent to 10.8% annually—a performance that spans multiple presidential administrations from both parties.

Your financial plan was built to endure political changes, market volatility, and economic uncertainty. By staying focused on your long-term goals and maintaining a disciplined approach to investing, you're positioning yourself to benefit from the market's historical tendency to reward patient investors regardless of who's in the Oval Office.

As always, this general information doesn't constitute personalized financial advice. Feel free to reach out if you'd like to discuss how any of these developments might affect your specific financial plan.