Will the election affect your investments?

I would have thought so, but the evidence indicates otherwise. Historical data shows that any impact political party changes in elections have had on short-term market returns have proven to be marginal, unpredictable, and not very statistically significant, says Gregg S. Fisher, president and chief investment officer of Gerstein Fisher, an independent financial advisory firm in New York City.

He writes in Forbes:

Election results are almost exactly 10 times less correlated to the S&P 500 than are five-year Treasury Bonds. If Congressional majorities were an investable asset, we would likely be looking to use them as a diversifying alternative asset class!

The S&P 500 has had positive returns 73% of the years in which Democrats controlled the House, vs. 68.2% of the years Republicans held the majority. The market as a whole had positive returns in 71.8% of the calendar years back to 1926, meaning the positive return percentage differences for each party represent only 1 or 2 years out of the decades each party has controlled the lower house of Congress. Likewise, the average return in "Democratic" years is 11.9%, while the mean in "Republican" House years is 11.5%--certainly not a statistically significant difference.

"Election results are indeed a factor in market return," Fisher says. "Significant, yes, but ultimately all but impossible to separate from every other economic, corporate, fundamental, global or psychological factor that influences the price of equities over the short run."