This infographic shows how financial markets have performed under Democratic and Republican presidents, and during election years in general. The market’s performance has been roughly the same under Democratic and Republican presidents. Over the 95 years they held office between 1860 and 2019, the annualized compound growth rate under Republicans was 8.3%. For the 65 years Democrats held the White House, it averaged out to 8.4%. Experts believe this statistically insignificant difference offers little to no value when it comes to your investing strategy. Month-to-month market performance during election years hasn’t followed any distinctive patterns—the numbers are very close to random. Stock volatility tends to be lower in the months before and after a presidential election. From 1860 through 2019, the average S&P 500 Index volatility 100 days before and 100 days after elections was 13.8%, compared with 15.7% overall. Markets are complex, and their performance isn’t tied to any one variable alone. Politics are just one piece of a much bigger picture. Above all, stay focused on your own goals and long-term investing strategies. That’s what matters most.

Learn more about why patience and perspective are so important when you invest. Goals and follow-through are big parts of every long-term plan. And remember: we’re all in this together.

* 60% GFD US-100 Index and 40% GFD US Bond Index, as calculated by historical data provider Global Financial Data. The GFD US-100 Index includes the top 50 companies from 1850 to 1900, and the top 100 companies by capitalization from 1900 to the present. In January of each year the largest companies in the United States are ranked by capitalization, and the largest companies are chosen to be part of the index for that year. The next year, a new list is created and it is chain-linked to the previous year’s index. The index is capitalization-weighted, and both price and return indices are calculated. The GFD US Bond Index uses the U.S. government bond closest to a 10-year maturity without exceeding 10 years from 1786 until 1941 and the Federal Reserve’s 10-year constant maturity yield beginning in 1941. Each month, changes in the price of the underlying bond are calculated to determine any capital gain or loss. The index assumes a laddered portfolio which pays interest on a monthly basis. All returns assume dividends/interest coupons are reinvested into their respective indexes. Average returns are geometric mean

**Vanguard calculations of Standard & Poor’s 500 Index returns in election years, based on data from Thomson Reuters.

Notes:
All investing is subject to risk, including the possible loss of the money you invest.

Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.