How do markets perform post-midterms?

History suggests a strong performance for the S&P 500 in the year following a midterm election, averaging 15% gains since 1950. This pattern has held after every midterm, including the near-term fourth quarter, which averages a 6.6% rise.

Markets dislike uncertainty, and elections create it. Once the political landscape is clear, investors can refocus on fundamentals. Current conditions are constructive for risk assets, featuring expected earnings growth of 37% and a resilient economy.

Valuations have corrected, offering a more attractive entry point. Additionally, the Fed may be less hawkish than feared, and depressed consumer sentiment historically precedes bullish stock markets. Investors should remain diversified and focused on long-term returns.