Transcription
Midterm election years tend to feel the worst for investors. Yet, historically, they often set up some of the best opportunities.
In a typical year, the market experiences about a 13% correction. During midterm election years, that rises closer to 19%. That volatility can feel uncomfortable, but it's not unusual. Here's what matters.
Once the election passes and uncertainty clears, markets have historically responded well. Returns average about 6% in three months, over 10% in 6 months, and roughly 13% over the next year with a very high probability of positive outcomes.
Of course, today's environment adds complexity. War-driven energy shocks can pressure inflation, delay rate cuts, and weigh on global growth. At the same time, after very strong multi-year returns, markets often face mean reversion over the next one to two years. We're also watching signs of fatigue, fewer stocks making new highs, defensive sectors stabilizing, and credit spreads widening. These are signals we take seriously.
Volatility is part of the process. Discipline is the strategy. We'll continue to monitor the data closely. Reach out if you'd like to discuss how this environment fits into your plan. If this was helpful, feel free to like, share, or reach out with your questions. Thanks for watching.