More citizens globally will cast democratic election ballots in 2024 than ever before1. Outside of the US, relevant elections occurring this year will also take place in India, Japan, Mexico, South Africa and the UK.
With Election Day now just 4 months away, it often feels like the US has been living through the current campaign cycle for a long time. The US does actually have a longer election cycle than most other democracies. For comparison, Mexico’s general election campaign lasts three months, and in the UK, the campaign lasts just 25 days!2
From a stock market perspective as seen in Chart 2, the US has experienced the 4th best start to the year during an election year when looking at returns through May 31, 2024.
One likely explanation for this is that market participants generally know what could be expected from a fiscal policy standpoint during a presidency of either primary candidates: former President Trump or President Biden. This has likely led the market to shrug off the uncertainty that would traditionally persist during the first half of the election year. While we are anticipating an emotional election season through November, it is important to remain consistent with your long-term investment strategy.
1 The Economist as of March 31, 2024
2 https://www.pbs.org/newshour/politics/why-u-s-election-campaigns-feel-so-long
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