The stock market is a fickle machine, where every small action has the potential to cause a larger reaction.
With the Republicans winning the midterms this week, the stock market could be due for some big movement.
And you could profit it from it, thanks to the GOP and these stocks…
“The Republican party’s victory could pave the way for pro-business policies.”
That’s what investors are starting to say, or at least hope for.
Either way, that sort of mindset sweeping through Wall Street could prove to be bullish in the short term. But let’s not count on that thought process to show us where and when to invest our money.
Let’s look at some history…
Following the past 13 midterm elections, U.S. stocks have gone up substantially for 6 months!
In years without a midterm election over that time period, the average gain of the benchmark S&P 500 stock market representative from November to April was just 3.7%.
However, in those 6-month stretches after elections, the S&P 500 has rallied by 16.5%…
That type of difference is startling, and it would be hard to call it a coincidence that the much bigger numbers always come after midterm elections.
It’s important to note that previous stock market results being a certain way doesn’t mean it will happen again, but let’s dig a little deeper and see what we find…
Different Midterm Scenarios
Not all midterm outcomes have impacted the stock market the same.
For instance, the market performed the worst when there was a Republican president and split Congress, but still gained by 3.5%.
And the best scenario, historically, has been when there was a Democratic president and Republican-controlled Congress—exactly what we have now.
And the new Republican Congress should push a few market sectors to the forefront based on basic policies that could make things easier for certain types of companies.
With the potential for more lenient rules surrounding particular regulations than Democrats wanted, technology stocks stand to have the most room to grow potentially.
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