In September, the Federal Reserve embarked on its much-anticipated easing cycle with a decisive 50 basis point rate cut—the first reduction in four years.
As the Fed turns its attention from inflation to the labor market, investors are beginning to focus on what this shift in monetary policy could mean for their portfolios.
Couple this with the impact of the presidential election, and it's understandable that many Americans may have strong feelings – and genuine concerns – about navigating the road ahead.
During these times, we can turn to history for valuable context.
Setting the Historical Stage
Among other things, presidential elections can often introduce a degree of uncertainty in the minds of investors about what the future may hold.
Looking back at previous election years, on average, there has been an uptick in equity market volatility in the months leading up to and including November, regardless of the candidates involved.
This is particularly evident when compared to non-election years.
However, the good news for investors is that this volatility tends to be short-lived.
A similar trend can be seen when looking at market returns.
Once Election Day hits, investors who weathered the additional volatility during election season have typically been rewarded with strong average gains, not only in the short-term, but also over the long-term.
On average, an investment made on Nov.
1 of presidential election years has rallied 16.2% over the next eight months and went on to gain 11.6% annually over the next decade, regardless of which party was elected.
Credit: Lincoln Financial
Credit: Lincoln Financial 
