As election season heats up, many people are asking how it will impact the stock market. While every election is different, quantitative asset manager Dimensional Fund Advisors (DFA) has dug into past election year data and found the following:

• It is difficult to identify systematic return patters in election 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.

DFA has put together a great deck illustrating this data, which can be found here: Market Returns During Election Years

 

Morling Financial Advisors, LLC, “Morling”, has entered into an arrangement with Dimensional Fund Advisors, L.P., “Dimensional”, pursuant to which Dimensional will provide certain reviews, reports, and templates. Morling and Dimensional are not affiliated entities.