It\u2019s Time for Investors to Look Past the U.S. Presidential Election \u2013 <\/strong>The U.S. presidential election likely stirs strong emotions in many readers. Some were elated, some greatly disappointed. When it comes to investing, however, these emotions must be set aside. History makes it clear that the stock market has no political preference. The chart below drives this point home. If a person invested money in the stock market only when their preferred political party was in the White House, it would have meant severely reducing total return over time. This is true of both Democrats and Republicans. Investing for the long-term\u2014regardless of who was president\u2014clearly delivered the best result.<\/p>\n\n\n\n Are You Protecting Your Retirement Investments in Today\u2019s Economy?<\/a><\/u><\/strong><\/p>\n\n\n\n Current factors, such as inflation and political uncertainties, pose a potential threat to your portfolio. And after years of building your retirement savings, it\u2019s crucial to protect it from these risks.<\/p>\n\n\n\n Now, more than ever, having a resilient strategy to protect your financial future is essential.<\/p>\n\n\n\n We recommend our free guide, How Solid Is Your Retirement Strategy?<\/a><\/u><\/em><\/strong>\u2019, which covers key investment approaches to support your financial security, including:<\/p>\n\n\n\n If you have $500,000 or more to invest, get our free guide by clicking on the link below.<\/p>\n\n\n\n Get our FREE guide: How Solid Is Your Retirement Strategy?<\/u><\/a><\/strong>2<\/a><\/sup><\/p>\n\n\n\n Indeed, the stock market tends to perform well over time no matter which party controls the White House. Since 1957, the S&P 500 Index has delivered an annualized return of +9.3% under Democratic presidents and +10.2% under Republican presidents.This is not to say elections have no impact on markets or the economy. They of course do\u2014the president influences and sometimes establishes economic policies, and these can impact how businesses generate profits and invest. But these types of impactful policy changes do not take place immediately\u2014there is plenty of time to assess how campaign proposals take shape as actual policy, and\/or whether many of the ideas floated on the campaign trail get watered down substantially or scrapped altogether.<\/p>\n\n\n\n Private Sector Activity Shows the U.S. Economy Accelerating \u2013 <\/strong>Amid the noisy news cycle surrounding the U.S. presidential election, many investors may have missed the fresh batch of strong economic data we saw this week. Importantly, U.S. services activity\u2014which accounts for most economic output in the U.S.\u2014accelerated in October from the previous month. According to the Institute for Supply Management (ISM), services activity rose from 54.9 in September to 56.0 in October, bolstered by rising employment. The ISM indices tell us about the breadth of growth\u2014not the magnitude\u2014so we can say for sure how accretive this may be to economic output. But we at least know a majority of companies that participate in the survey are reporting expansionary activity, with 14 industries reporting growth in October compared to 2 in September. Looking more broadly, the Bureau of Economic Analysis reported that U.S. GDP expanded by 2.8% in Q3, essentially marking a continuation of the second quarter\u2019s 3.0% pace.<\/p>\n\n\n\n The private sector also showed strength in this report. When we strip out the impact of increased government spending and look just at private sector contributions, we see that U.S. GDP expanded at a 2.5% annualized rate in Q3. That\u2019s up from the 2.2% private sector pace set in Q2.3<\/sup><\/p>\n\n\n\n The Federal Reserve Cuts Rates by a Quarter Percentage Point, As Expected \u2013 <\/strong>The Federal Reserve\u2019s September meeting featured a somewhat surprising 50 basis-point rate cut. The November meeting went exactly as investors had expected. The Federal Reserve cut the benchmark fed funds rate by a quarter percentage point, to a range of 4.5% to 4.75%. Recent inflation reports continue to suggest that the Fed\u2019s 2% target is well within reach, and softening trends in the labor market indicate that rising wages are no longer a key driver of inflation. The three-month average of payroll gains in the private sector is 67,000, which is the lowest since 2020. To be fair, the impact of the hurricanes and the Boeing strikes impacted the October jobs figures substantially, which is a factor the Fed weighs. But overall, the Fed sees relatively stable employment, strong consumer spending, and falling year-over-year inflation rates. These data have given them wiggle room to move rates lower from here.4<\/sup><\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2024\/11\/chart1-2.png\")
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