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Don't Try to Time Elections

Resist the urge to let predictions affect your portfolio.

Ian Tam: With the U.S. presidential election fast approaching, you as an investor might be tempted to tactically adjust your portfolio in anticipation of what might happen in the wake of a Biden or a Trump administration. But does it actually make sense to do this? Let's have a look at what the data says.

This chart shows what would happen if you had invested $100,000 U.S. dollars into the S&P 500 Total Return Index on Oct. 31 in each presidential election year since 1972. Each line represents a different presidential term with the president highlighted on the right. You can see that over the medium term, or about 48 months, the results vary dramatically.