Should You Wait Until After the Midterm Elections to Buy the S&P 500?

Since 1950, the S&P 500 has risen in 14 out of 19 midterm years when measured from two weeks before the election to the same date one year later. The average gain during those years was 1.4%, slightly higher than the 1% average gain when investing on Election Day. Waiting for the election results may have only saved an investor around 4% at most.

In most midterm years, the difference in price between buying two weeks before the vote and on the election day has been minimal. Waiting for the election result could potentially lead to paying more for the index, rather than saving money. Even in the worst midterm year, 1986, the index still closed 1% above its Election Day level a year later.

The two weeks before the vote have only contributed to a little under 2 percentage point difference in average gains. Therefore, it is likely more beneficial to invest in an index fund and not hold off for the midterms, as the price paid in the two weeks before the vote is more likely to be higher than lower.