Introduction
What do the results of yesterday’s election mean for your finances? As a CERTIFIED FINANCIAL PLANNER™ professional, I’m here to tell you something you might not expect:
I have absolutely no idea.
Quite frankly, I’d be skeptical of anyone who claims to know exactly what’s going to happen next. Every election cycle, we hear predictions about what the results will mean for the stock market, the economy, inflation, and our finances.
One side tells us the economy is headed for disaster. The other promises prosperity. Financial commentators offer their predictions, market analysts publish their forecasts, and social media fills with people explaining exactly what investors should do next.
The truth is that none of us really know what happens next. I mean, just think about how many people were prepared for COVID.
Despite my take, it doesn’t mean I think elections are unimportant. Government policies can and will have meaningful financial consequences. It just means there’s a significant difference between understanding how policy might affect your finances and pretending we know exactly how those changes will unfold.
What does history tell us about Midterm elections?
According to research published by J.P. Morgan Asset Management in October 2026, the S&P 500 has generated positive returns in the 12 months following every midterm election since 1950.
Even more impressive? The average return during those periods was approximately 15%. [1]
Charles Schwab’s research tells a similar story.
Looking at midterm elections since 1974, Schwab found that:
- The S&P 500 gained an average of 5.7% in the three months following midterm elections.
- The index gained an average of 12.4% in the following six months.
- All 13 six-month periods examined produced positive returns. [2]
This doesn’t mean that we should lock it in that the market will rise over the next year and it mainly comes down to a phrase I love as a financial planner:
Past performance does not guarantee future results.
It’s a disclosure that appears in nearly every investment presentation, but it’s also one of the most important concepts for investors to understand. Historical data tells us what happened in the past, and sometimes we will see patterns that may look like they are correlated, but it doesn’t mean that just because it happened before, it will happen again with 100% certainty.
Even if the markets do perform well over the next 12 months, I wouldn’t chalk it up to the election results being directly responsible.
The Danger of Making Financial Decisions Based on Predictions
When we’re uncertain about the future, it’s natural to want answers and feel anxious. The stock market, in addition to many other things, allows us the opportunity to act on those feelings. As a financial planner, I’ve seen clients act on feelings and it has put them in a worse position compared to if they stayed the course.
One unfortunate situation I came across was a client who sold all his stocks during the March 2020 crash and took almost a full year to re-invest his money, causing him to miss out on the market rebound.
Maybe you’re worried that the election results will lead to a recession, so you consider selling your investments. Maybe you’re convinced a particular industry will benefit from the new political environment, so you decide to invest heavily in it. We have every right to make these predictions, but even if we are right, it doesn’t guarantee that it will turn into a successful investment decision.
Financial markets are forward-looking. Investors are continuously adjusting prices based on expectations about the economy, interest rates, and future corporate profits. By the time something becomes obvious to the general public, financial markets may have already incorporated much of that information.
That’s one major reason attempting to time investments around political events can be so difficult.
When I work with my clients, I believe that it will be more productive to focus on what we can actually control.
How to Prepare
We spend so much time worrying about what might happen tomorrow that we usually overlook the things we can improve today.
You don’t need to know what the stock market will do next year to build an appropriate investment portfolio.
You don’t need to predict the next recession to establish an emergency fund.
You don’t need to know exactly what future tax legislation will look like to start thinking about tax-efficient financial decisions.
Instead, here are some practical things you can work on today to better position yourself for when things inevitably change:
1. Build a financial cushion.
Having adequate cash reserves can help you navigate unexpected expenses, job losses, or periods of economic uncertainty without immediately relying on debt or selling investments.
2. Make sure your investments match your goals.
An appropriate investment strategy considers your time horizon, financial goals, and comfort with risk. If you have specific goals that are coming up in 2 years time, your portfolio should look a lot different than the one intended to fund your retirement decades in the future
3. Avoid putting all your eggs in one basket.
Diversification won’t eliminate investment risk, but it can help reduce the consequences of relying too heavily on one company, industry, or investment.
4. Create flexibility in your financial plan.
I’m sure most of us can relate when I say that life rarely goes according to plan.
Your income might change. Your priorities might evolve. Unexpected expenses might arise.
A good financial plan should be flexible enough to adapt as your circumstances change.
5. Focus on progress, not predictions.
Consistently saving, managing debt, monitoring expenses, and reviewing your financial goals are actions you can take regardless of who’s in office.
These decisions might not generate exciting headlines, but they can have a meaningful impact on your long-term financial well-being.
Financial Planning Isn’t About Knowing the Future
One of the biggest misconceptions about financial planning is that its value comes from predicting what’s going to happen. When people find out I’m a financial planner, one of the first things they ask me is “what’s the next hot stock?” My answer usually disappoints them because I tell them I’m not in the stock picking business.
Financial planning is about understanding where you stand today, identifying where you want to go, and making thoughtful decisions with the information available. It’s recognizing that uncertainty is unavoidable while finding ways to manage its impact on your life.
Will the stock market rise over the next 12 months?
Will inflation continue to decline?
Will new policies improve the economy?
I don’t know the answers to these questions right now, and neither does anyone else with certainty. What I do know is that we can take meaningful steps today to improve our financial position, regardless of what happens next.
Disclosure
This content is provided for informational and educational purposes only and should not be construed as personalized investment, tax, or legal advice. No advisory relationship is created by reading this article. Investment advisory & financial planning services are offered only pursuant to a written agreement through Noor Financial Services, a Registered Investment Adviser. Please consult with a qualified professional regarding your specific financial situation.
Sources and Further Reading
[1] J.P. Morgan Asset Management — October 7, 2026
How Do Markets Perform Post-Midterms?
Research examining S&P 500 performance following midterm elections since 1950.
https://am.jpmorgan.com/us/en/asset-management/institutional/insights/market-insights/market-updates/on-the-minds-of-investors/how-do-markets-perform-post-midterms/
[2] Charles Schwab — 2026
What the 2026 Midterms Could Mean for the Markets
Historical analysis of stock market returns surrounding midterm elections since 1974.
https://www.schwab.com/learn/story/what-2026-midterms-could-mean-markets
