U.S. Presidential elections are one of the major events impacting Global markets.
Performance of S&P 500 Index (a bellwether index of US Markets), post US elections, throws some interesting points.
- Data highlights that Presidential elections have generally acted as a catalyst to U.S. Markets.
- U S markets on an average moved by 6.5% in a six-month period post elections.
- One year move post-elections is even more impressive with average returns at 15.4%
- But for the dot com bubble in 2000 and sub-prime crises during 2008, US markets generally rewarded investors post elections.
The following table highlights the absolute dollar returns of S&P 500 index post US elections.
Depreciating Rupee to further enhance returns –
Indian Rupee on an average depreciated by about 2.5% annually against USD over the past 20 years. Incremental returns to investors in rupee terms may be higher if this phenomenon continues.
Exposure to U.S markets via international ETFs / Indexed funds may be an opportunity for domestic investors over the next 1 year.
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