Historically, How Has the Party Controlling Congress Impacted the Market?

Historically, How Has the Party Controlling Congress Impacted the Market?

February 03, 2023

Historically, how has the party controlling Congress impacted the market? Paul L. Moffat, President and Senior Financial Planner at Arista Wealth Management, explains in the newest episode of Arista Advice!

Full Transcript: 

Hello welcome to Arista Advice! Question of the week is: "Paul, what does history tell us about the market and control of the US Congress?" Nearly a century of US stock market returns suggest that making investment decisions based on who controls the Congress and the chambers of Congress is unlikely to lead to better investment outcomes.

As you'll see on this chart, red is Republicans (House and Senate). Blue is Democrat (House and Senate), and purple is mixed. From 1926 to 2022, stocks trended higher regardless of whether your political party, the Democrats or the Republicans, controlled the House and the Senate or whether control was mixed. Decades of research suggests that control of Congress has little impact for the long-term investor. Shareholders invest in companies, not political parties, and companies focus on serving their customers and growing their businesses, regardless of what happens in Washington. 

So don't get wound up in the political news and the soundbites in the 24-hours news cycle and the five and the ten and the 30 and the 50 different political stock channels that are on TV constantly going and going. Ignore it. Step away from it. In many cases, turn it off. Delete it. Go about implementing your long-term goals and staying invested as a long-term investor.

Always remember to go to AristaWealth.com to get other tools, tips, videos, and resources to help you live a life of significance.