Where to invest after the US election results?

The S&P500 has risen in 9 of the 11 sessions following the announcement of results since the stock market opened in 1980. However, if we look at the month of November after the election results, the story is more balanced, with 5 positive months and 5 negative ones - not counting November 2024, which has so far appreciated by more than 3%.

If the point of analysis is different, i.e. if we look at how the index performed in the year following the elections, then we have an average appreciation of 10.68%, which shows that although elections can mean a lot of volatility and turbulence in the markets in the days following the polls, especially when there is no clear winner, they rarely change the long-term trend.

This means that elections are not very different from other market risks, such as natural disasters, workers' strikes or wars. The most important thing is to know what each of these risks could mean for certain companies and what impact they will have on their future profits.

In the case of elections, for example, the risks lie in possible policy changes, which tend to be more favorable for most stocks when there is a government without a majority, or divided, as it is more complicated to approve radical changes in governance. In an analysis of the last few presidential cycles, we see that the S&P500 appreciated at an annualized rate of 13% from the time Barack Obama was elected until Donald Trump's first election, with the Consumer Discretionary, Information Technology, Real Estate and Health sectors standing out.

Since Donald Trump was first elected until Joe Biden's victory, the S&P500 has risen 14% at an annualized rate, with the Information Technology, Consumer Discretionary, Healthcare and Industrials sectors standing out. In this term, one sector stood out for its negative performance, and that was Energy.

From Joe Biden's victory over Donald Trump until early November 2024, before the most recent elections, the S&P500 appreciated 16% at an annualized rate, with the Energy, Information Technology and Financial sectors standing out.