Midterms Likely To Shake Up Your Stock Portfolio — The 95% Statistic Investors Should Know
Midterms Likely To Shake Up Your Stock Portfolio — The 95% Statistic Investors Should Know
John SchmollSun, September 20, 2026 at 1:00 PM UTC
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Elizabeth Fernandez · Getty Images
Midterm elections can stir fear among many investors. It’s easy to read the headlines and believe the worst-case scenario is probable. However, just because control of Congress can change hands, that doesn’t mean it will automatically guarantee your portfolio will drastically move in a particular direction.
In fact, history shows that while swings occur leading up to a midterm, gains nearly always follow in the short term after the election. Yes, who controls Congress can affect taxes, regulation and spending, but those aren't traditionally the key driver of portfolio performance.
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For investors wondering whether this year's election results could derail their long-term goals, history suggests taking a broader view of the forces that have traditionally driven market performance. Here's why.
Using History as a Guide
Uncertainty generally creates an unsettled stock market. In our current landscape, affordability and the conflict in Iran, among other factors, drive much of the volatility. As elections get closer, conditions may seem even more untenable.
History is a helpful reference.
“Ahead of the vote, markets tend to get choppier as investors try to price in uncertainty," said Scott E. Jones, founder and financial advisor at Genesis Wealth Advisor Group. "After the vote, it can take anywhere from a few days to a couple of weeks for that to settle while the market digests the result."
Beyond settlement time, it's beneficial to look at how the stock market has performed in recent cycles. Fidelity reporting offered guidance on what to expect.
"Since 1938, the S&P 500 almost always -- 95% of the time -- posted price gains in the 12 months following midterm elections,” noted Fidelity.
Capital Group further cemented this ideal. “Since 1950, the average one-year return following a midterm election was 15.4%, reported Capital Group.
As you consider your portfolio, remember that who controls Congress does affect it, but it’s not the only factor, as “[...] Federal Reserve policy, corporate earnings and valuations drive markets far more than who controls Washington,” noted Jones.
How Different Election Outcomes Can Affect Your Portfolio
Reading the headlines and listening to the talking heads can stoke fear in many investors. Much of the content is just messaging, but different results may affect your portfolio in different ways.
It's wise to consider possible outcomes, such as unified or divided control of Congress.
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"Unified control raises the odds of larger policy changes in both directions," said Jones. "Divided government lowers those odds."
For instance, if Democrats take control of Congress, the administration may struggle to advance its initiatives. If Republicans hold onto power, the administration may find it easier to enact its policies.
Tax policy is one possible political football that might come into play, depending on the election outcome. Jones directs investors to take heart and follow their investment plan by "[focusing] on the hand we are dealt” relative to potential changes in tax policy, spending or regulation.
Again, history can be a useful reference point. Who controls Congress has had minimal impact on portfolio gains dating back to 1933, per Capital Group. The publication stated that positive returns have occurred during both unified and divided control of Congress.
Your Planning May Matter More Than the Election Results
Reacting to headlines is rarely a good move in relation to your portfolio. Having an investment plan or goal can guide your decisions, per Morgan Stanley. The plan can help protect against unplanned shifts that can derail your goals.
Jones explained that the headlines can create noise that may frighten investors.
“The better move is to review your plan, not react to the noise," he noted. Volatility is a part of the investing landscape. Panic-induced selling of part of your portfolio may create unnecessary risk and make it harder to achieve your goals.
Rather than react, your plan can help drive decisions. As Jones noted, if fear is leading you to consider significant portfolio changes, review your plan to avoid absorbing a substantial loss.
“This is not the time to override your process. It is the time to rely on it,” he added.
Finally, remember that the holistic economic cycles, such as earnings and business investments, drive returns more than a single election, per Fidelity. Keeping that in mind when reviewing your investment plan can go a long way toward weathering a possible storm.
Midterm elections can create volatility. History shows that's typically short-lived. Review your investment plan to avoid panic selling that may harm your portfolio.
Editor’s note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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