How to play the midterms: Let it ride
SPY•Carson Group strategist Ryan Detrick says stocks have gained an average of 14.8% in the 100 days after the past 19 midterm elections. He also notes that average annual returns were 15.1% with a split Congress and 8.1% with unified control.
1. Midterm market patterns
Ryan Detrick, chief market strategist at Carson Group, cautioned investors against predicting which sectors will benefit from midterm results, citing past expectations for marijuana and coal stocks that did not match what happened. He said the president’s party has lost House seats in all but three midterms since 1934, averaging losses of 25.7 House seats and 3.6 Senate seats. Stocks have returned an average of 15.1% annually when the chambers were led by different parties, compared with 8.1% under unified control; over the past 19 midterms since 1950, the S&P 500 has gained an average of 14.8% in the aftermath.
