# Political Dread and Portfolio Strategy > Election volatility often leads investors to sell stocks, but historical data shows long-term gains from staying invested. - Title: Political Dread and Portfolio Strategy · Kiplinger | Shortify - Summary: Election volatility often leads investors to sell stocks, but historical data shows long-term gains from staying invested. - Keywords: midterm election, stock market, portfolio strategy, political impact, election volatility, s&p 500, loss aversion, behavioral bias, election cycle, market volatility, Kiplinger - Source: Kiplinger — https://kiplinger.com/investing/dont-let-political-dread-dictate-your-portfolio - Published: 2026-11-13T13:00:00+00:00 - Read time: 3 min - Topics: midterm election, stock market, portfolio strategy, political impact, election volatility, s&p 500, loss aversion, behavioral bias, election cycle, market volatility ## Election Volatility The day after Democrats won control of both the House and Senate, the Dow jumped 3%, its best post-midterm day since 1982. ## Market Plunge Follows A day later, stocks plummeted, and semiconductors plunged more than 12%, their worst day since the COVID-19 crash. ## Historical Pattern In 2020, stocks posted their worst week since the March sell-off of that year the week before the election, then their best election week since 1932. ## 2022 Election Pattern In 2022's midterm season, stocks rose before the vote, plummeted after, then rallied hard to end the week. ## 2024 Election Pattern Stocks nerves going into the 2024 election also proved fleeting, with the market staging a historically strong surge second only to the 2020 rally in the week after the election. ## Unsupported Fear Investors appear to be once again falling into what has become a common pattern of allowing politics to spook their portfolio strategy, despite the fact that in all of those recent cases, investor nerves around… ## Long-Term Stock Performance Stocks were up at least 15% in the year after each of the last three elections. ## Historical Probability Probabilities favor a positive outlook in general, stocks have risen in the year after elections nearly 75% of the time since 1928. ## Party Independence Likewise, U.S. stocks tend to rise regardless of which party holds the White House or how Congress is split. ## Historical Investment Example By the end of 2024, $100 invested in the S&P 500 at the end of WWII grew to about $37,000, but if that same $100 was invested only when a Republican president was in the… ## Partisan Investment Risk If invested only when a Democrat led the country, it rose to just $4,000. ## Why Sell During Elections? The unusual volatility around elections can be largely explained by investors' fear that losses may emerge from political change. ## Political Promises Republicans and Democrats alike suggest they will shepherd markets toward better returns while the opposing party is doomed to fail, creating a fear of losses in the investing public. ## Loss Aversion Humans are extremely averse to loss, and the fear of it creates irrational investing behavior. ## Behavioral Biases Economists have shown that we hate losing money even more than we like gaining it. ## Recency Bias Election weeks are a perfect storm for behavioral mistakes like recency bias, which leads us to project the latest move far into the future. ## Market Volatility One large drop or a series of volatile days starts to feel like the beginning of a crash. ## Market History Intriguingly, market history shows the opposite is more likely: high volatility tends to cluster around bottoms in equities rather than at tops. ## Availability Heuristic The availability heuristic makes vivid, constantly repeated news seem more important and more likely than it really is. ## Herding Behavior Finally, herding pulls us toward doing what everyone else seems to be doing. We naturally assume the crowd knows more than we do. ## Key takeaway Investors should avoid shifting portfolios due to elections, as historical patterns show stocks rise after elections regardless of party control.