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Market returns during election years (Dimensional Fund Advisors)

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Explores the returns of stock and bond markets in the US based on election results and presidencies going back to 1926.

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Market returns during election years (Dimensional Fund Advisors)

  1. 1. Market Returns During US Election Years
  2. 2. Market Returns and Election Years 2 Sources: S&P data © 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved; MSCI data © MSCI 2019, all rights reserved; Bloomberg Barclays Capital data provided by Bloomberg. Past performance is not a guarantee of future results. It is difficult to identify systematic return patterns in elections years. On average, market returns have been positive both in election years and the subsequent year. Market expectations associated with election outcomes are embedded in security prices.
  3. 3. Annualized Returns During US Presidential Terms 3 #50085-0116 Each president’s annualized return begins with the first full month of returns of presidency. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index Returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. Source: S&P data © 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. S&P 500 Index -2.90% 20.20% 15.80% 13.90% -4.40% 6.20% 11.7% 17.6% 16.0% -10% -5% 0% 5% 10% 15% 20% 25% Richard Nixon Gerald Ford Jimmy Carter Ronald Reagan George H.W. Bush William Clinton George W. Bush Barack Obama Donald Trump Republican Republican Democrat Republican Republican Democrat Republican Democrat Republican 02/69 – 08/74 09/74 – 01/77 02/77 – 01/81 02/81 – 01/89 02/89 – 01/93 02/93 – 01/01 02/01 – 01/09 02/09 – 01/17 02/17 – 3/20
  4. 4. Returns During and After US Election Years 4 Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. Source: S&P data © 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. S&P 500 Index: 1928–2017 -60% -40% -20% 0% 20% 40% 60% 80% 1928: Hoover vs. Smith 1932: Roosevelt vs. Hoover 1936: Roosevelt vs. Landon 1940: Roosevelt vs. Willkie 1944: Roosevelt vs. Dewey 1948: Truman vs. Dewey 1952: Eisenhower vs. Stevenson 1956: Eisenhower vs. Stevenson 1960: Kennedy vs. Nixon 1964: Johnson vs. Goldwater 1968: Nixon vs. Humphrey 1972: Nixon vs. McGovern 1976: Carter vs. Ford 1980: Reagan vs. Carter 1984: Reagan vs. Mondale 1988: Bush vs. Dukakis 1992: Clinton vs. Bush 1996: Clinton vs. Dole 2000: Bush vs. Gore 2004: Bush vs. Kerry 2008: Obama vs. McCain 2012: Obama vs. Romney 2016: Trump vs. Clinton ◼ Average Return Year Subsequent to Election = 9.9% ◼ Average Return During US Election Year = 11.3% #50085-0116
  5. 5. Annualized Returns During US Presidential Terms 5 #50085-0116 Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. Source: S&P data © 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. S&P 500 Index: 1929–2019 -60% -40% -20% 0% 20% 40% 60% 80% 1929–1932: Hoover 1933–1936: Roosevelt 1937–1940: Roosevelt 1941–1944: Roosevelt 1945–1948: Roosevelt 1949–1952: Truman 1953–1956: Eisenhower 1957–1960:Eisenhower 1961–1964: Kennedy 1965–1968: Johnson 1969–1972: Nixon 1973–1976: Nixon 1977–1980: Carter 1981–1984: Reagan 1985–1988: Reagan 1989–1992: Bush 1993–1996: Clinton 1997–2000: Clinton 2001–2004: Bush 2005–2008: Bush 2009–2012: Obama 2013–2016: Obama 2017–2019: Trump Average Return for US Presidential Terms = 10.3%
  6. 6. Returns During and After US Election Years 6 Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. Source: Bloomberg Barclays data provided by Bloomberg. Bloomberg Barclays US Aggregate Bond Index: 1976–2017 -60% -40% -20% 0% 20% 40% 60% 80% 1976: Carter vs. Ford 1980: Reagan vs. Carter 1984: Reagan vs. Mondale 1988: Bush vs. Dukakis 1992: Clinton vs. Bush 1996: Clinton vs. Dole 2000: Bush vs. Gore 2004: Bush vs. Kerry 2008: Obama vs. McCain 2012: Obama vs. Romney 2016: Trump vs. Clinton ◼ Average Return Year Subsequent to Election = 7.3% ◼ Average Return During US Election Year = 7.6% #50085-0116
  7. 7. #50085-0116 Annualized Returns During US Presidential Terms 7 Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. Source: Bloomberg Barclays data provided by Bloomberg. Bloomberg Barclays US Aggregate Bond Index: 1977–2019 -60% -40% -20% 0% 20% 40% 60% 80% 1977–1980: Carter 1981–1984: Reagan 1985–1988: Reagan 1989–1992: Bush 1993–1996: Clinton 1997–2000: Clinton 2001–2004: Bush 2005–2008: Bush 2009–2012: Obama 2013–2016: Obama 2017–2019: Trump Average Return for US Presidential Terms = 7.1%
  8. 8. US Presidential Elections and S&P 500 Returns 8 Past performance is not a guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Source: S&P data © 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Histogram of Monthly Returns: January 1926–December 2019 Below-20% -20%to-19% -19%to-18% -18%to-17% -17%to-16% -16%to-15% -15%to-14% -14%to-13% -13%to-12% -12%to-11% -11%to-10% -10%to-9% -9%to-8% -8%to-7% -7%to-6% -6%to-5% -5%to-4% -4%to-3% -3%to-2% -2%to-1% -1%to0% 0%to1% 1%to2% 2%to3% 3%to4% 4%to5% 5%to6% 6%to7% 7%to8% 8%to9% 9%to10% 10%to11% 11%to12% 12%to13% 13%to14% 14%to15% 15%to16% 16%to17% 17%to18% 18%to19% 19%to20% Above20% Monthly Return Ranges  Month a Republican Won  Month a Democrat Won  Non-Election Month
  9. 9. Markets Have Rewarded Long-Term Investors under a Variety of US Presidents 9 Past performance is not a guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Source: S&P data © 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Growth of a Dollar Invested in the S&P 500: January 1926–December 2019 $0 $1 $10 $100 $1,000 $10,000 1926 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1989 1994 1999 2004 2009 2014 2019 Republican President Democratic President Coolidge Hoover Roosevelt Truman Eisenhower Kennedy Johnson Nixon Ford Carter Reagan Bush Clinton Trump Bush Obama

Explores the returns of stock and bond markets in the US based on election results and presidencies going back to 1926.

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