With high tax rise, more public sector spending and more borrowing forming part of the budget, (in line with expected left wing policies) , it is often assumed that these less “business friendly” governments have a negative impact on the stock markets. It is true that over the years, the UK FTSE has performed better under a conservative government, with average gains of 10.8% against 6.2%

An even bigger political event taking place this week is of course the US election where Donald Trump aims to re enter the White House after four years of Democrat rule.

Interestingly despite Republican politics being seen as more “business friendly”, since 1945, markets have performed better under Democratic governments, averaging 10.8% gains against 4.8%

Government fiscal policy is important in dealing with financial issues that arrive, though the correlation between a certain right or left leaning government and good and bad stock market performance does not exist. In fifty years time the above stats could reveal very different numbers.

As an investor the focus you should have is on the quality of what you are investing in. Companies with good products, good strong management. Funds with good managers who buy good companies in good sectors. Taking this approach over looking at politics is likely to yield you more success.

Large Geo political events, such as Covid of course have an impact on market performance but this is nearly always in the short term. To succeed over the long term, often these events are no more than a blip. The world is currently in a rather precarious place, with two large wars with influential global players involved yet stock markets remain strong.