With the election just over a week away, many investors are on edge about the outcome and its effect on the economy and their portfolios. If we elect one candidate, the path forward looks distinctly different than if we choose the other. Beyond the election, the future economic situation also looks murky. Will the Federal Reserve manage a soft landing by lowering short-term interest rates just enough to prevent a recession while not restoking the fires of inflation?

It’s natural to worry about how the election could affect your portfolio. In uncertain times, fears of market declines often surface — especially if you’re closer to retirement, where the dollars at risk are more significant and there’s less time to recover.

In considering this topic, think about the words of famed management theorist (and CU graduate) W. Edwards Deming who said, “Without data, you’re just another person with an opinion.” While each election is unique, it’s helpful to look at how markets have behaved through previous elections for any insight into what could happen this year.

A recent Vanguard analysis considered the performance of a U.S. 60/40 portfolio, which is made up of 60% U.S. stocks and 40% Treasury bonds. In looking at data from 1860 to 2022, the average return in election years was 8.7% while in non-election years it was 7.7%. Also, among Vanguard’s conclusions is that the U.S. stock market has been less volatile than average in the 100 days before and after a presidential election. That suggests that election cycles do not necessarily bring poor or volatile markets.

Similarly, Dimensional Fund Advisors surveyed market performance during presidential election months and found little difference when compared to non-election months. Dimensional also regularly updates a chart of S&P 500 performance under different presidents. The total return of the index under a large majority of presidencies has been positive over the last century.

There are many issues at stake in this election that may be more important to you than investments. I don’t want to minimize those. But when it comes to your portfolio, history does not teach us to become dramatically more conservative or aggressive because of a presidential election. Even if we knew who was going to be elected, we don’t know what will happen to the stock market in the months and years to come even though history has largely rewarded long-term stock investors.

I’d like to bring this back to you and your investment behavior. In past elections, I’ve seen prudent and thoughtful investors be tempted to abandon their investment strategy in the wake of an election that didn’t go their way. Many others have sat tight — albeit nervously — and continued with their plan. If you’d like to make at least a small change now, you could rebalance your investments to your target (such as 60% stocks) as the U.S. stock market has had a wonderful run this year. If this doesn’t feel like enough of a change, your target investment strategy could be too aggressive for your situation.

Whatever your conclusions are, you’re likely to be thinking more clearly now and may make a better decision than right after election night. Among the worst investment strategies is one that becomes more conservative after the stock market has dropped. By considering your options now, you can minimize the emotional decision-making that often leads to poor investment outcomes.

David Gardner is a certified financial planner and is admitted to practice before the IRS. He recently retired from an independent investment advisory firm and continues to write about financial topics. As financial planning is only possible after knowing the client, the column is not intended to be personal financial or tax advice. Data presented is believed to be accurate at the time of writing.