Investors may be wondering whether they should adjust their portfolios based on who wins control of Congress in the upcoming midterm elections. History suggests they should not.
Nearly a century of data shows no reliable pattern linking any political party’s control of Congress to better or worse stock market returns. From 1926 to 2025, stocks trended upward under Democratic majorities, Republican majorities, and in periods of mixed control.
Election results are just one of many factors impacting markets. Inflation, interest rates, economic growth, technological innovation, geopolitical events, and countless other variables influence market prices every day.
It’s also important to remember that markets are forward looking. Expectations about election outcomes are reflected in prices long before any votes are cast. By the time the results are known, much of that information has already been reflected in the market. And while surprises can, and do, happen in elections, drawing a straight line between any single outcome and investment results is generally futile.
While elections undoubtedly matter, the evidence suggests they’re unlikely to provide investors with a reliable roadmap for portfolio decisions. Rather than trying to outguess markets, investors may be better served by staying disciplined, remaining diversified, and sticking to their long-term financial plan.
Past performance is not a guarantee of future results.
In USD. Growth of wealth shows the growth of a hypothetical investment of $1 in the securities in the S&P 500 Index. S&P data © 2026 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Data presented in the growth of wealth chart is hypothetical and assumes reinvestment of income and no transaction costs or taxes. The chart is for illustrative purposes only and is not indicative of any investment. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.
The original version of this article has been reprinted with permission and was written by Isabelle Williams, Deputy Head of Investment Solutions & Vice President and Kristen Swing, Investment Strategist of Dimensional Funds Advisors.
This content is developed from sources believed to be providing accurate information and provided by Dimensional Fund Advisors. Please consult legal, finance or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.