The question on every investor’s mind is “What impact will each candidate and their party have on the performance of the stock market?”

In looking at elections past, market reaction to election results appear to work moderately in favor of Republicans. During the last 15 elections, the S&P 500 stock index rose an average of 2.25 percent in years when Republicans captured the presidency (nine times).  Conversely, during the six times the Democrats won, markets gained an average of 1.31 percent from Election Day to the end of the election year (1).

Historically, during the same 15 elections, the average S&P 500 return for the year following a Presidential election dramatically underperformed that of an election year.  Returns for the S&P 500 during post-election years averaged just 3.06% as compared to an election year average of 9.29% (2).