10/12/2026
Election years can make investors nervous. And with the 2026 midterm elections approaching, it’s natural to wonder what they could mean for the stock market.
The interesting thing is that history gives us a pattern worth paying attention to.
Going back more than a century, midterm elections have often resulted in a shift in political power in Washington. And in the months leading up to the election, markets have historically experienced increased volatility.
But there’s another part of the historical pattern that investors should keep in mind. After that volatility, markets have often finished the year on a stronger note.
Take 2018 as an example.
🔵 Democrats gained a lot of ground in Congress in what became known as the “Blue Wave.”
From September through the end of the year, the S&P 500 gave back much of its gains and experienced a major decline. Then came 2019, when the market had a very strong year.
Does that mean 2026 will follow the same path? Absolutely not.
History doesn't repeat itself, but it often rhymes.
The bigger takeaway is understanding that political uncertainty can create volatility and volatility is a normal part of investing.
For long-term investors, the question shouldn't necessarily be, “Who will win, and what will that do to my portfolio?” Instead, consider: “Is my portfolio positioned appropriately for my goals, regardless of who wins?”
At the end of the day, stock prices are driven primarily by the underlying performance and expectations of businesses, including corporate earnings, economic conditions and future growth.
Political opinions can influence sentiment in the short term. But over time, earnings matter.
So as we head toward another election season, remember:
🫵Expect some volatility.
🧠Stay focused on your long-term plan.
đź’ˇ Don't make investment decisions based solely on political headlines.
At SKG, we help clients keep market events, including election cycles, in perspective and make decisions based on their broader financial goals.
