Every election cycle, something remarkable happens. Half the country becomes convinced that if their candidates lose, the economy is doomed. The other half becomes convinced that if their candidates win, the market is headed straight up.

Then the election happens. And eventually, the stock market goes back to doing what it has done through Democrats, Republicans, wars, recessions, inflation, scandals, technological revolutions and an impressive number of predictions that turned out to be completely wrong: businesses adapt, earnings grow, the economy evolves and, over time, markets have historically moved higher.

With the 2026 midterm elections approaching—and artificial intelligence seemingly appearing in every investment conversation—I think investors need to hear a simple message:

Vote in the voting booth. Invest according to your financial plan.

Those are two very different activities.

The Market Doesn’t Belong to Either Political Party

We all have political opinions. I certainly do. But your portfolio doesn’t care how you vote.

Historical data makes the point. Fidelity has reported that, looking at SCP 500 returns from 1926 through 2023, average annual stock returns were positive under every major combination of political control: approximately 14.0% with unified Democratic government, 14.5% with unified Republican government, 16.6% with a Democratic president and divided government, and 7.3% with a Republican president and divided government.

That does not mean markets rise every year. They absolutely do not. Bear markets, recessions and major declines have occurred under both parties. The important point is that long-term market growth has not belonged to one party.

Capital Group has illustrated the same idea another way: a hypothetical $1,000 invested in the SCP 500 in 1933 and left invested across Democratic and Republican administrations grew to roughly $21.9 million by the end of 2023.

Think about everything that investor lived through: World War II, Korea, Vietnam, the Cuban Missile Crisis, Watergate, double-digit inflation, the oil embargo, the 1987 crash, the dot-com bubble, 9/11, the Global Financial Crisis, COVID, multiple wars and multiple recessions.

Getting the political forecast right has historically been far less important than remaining invested in the growth of American business.

Midterm Elections Are Especially Interesting

The 2026 election is a midterm, and midterm years have historically produced plenty of investor anxiety.

Fidelity reports that since 1938 the SCP 500 has produced a price gain in the 12 months following a midterm election 95% of the time. Its research also shows average returns of roughly 5% during the second year of a presidential term and approximately 14% during the following 12 months.

Capital Group found that since 1950, the average SCP 500 return during the one year following a midterm election was 15.4%, and its study found no negative one-year post-midterm periods through the period examined.

Schwab found a similar pattern over a shorter history. Since 1974, the SCP 500 averaged approximately 5.7% in the three months following a midterm election and was positive in 11 of 13 periods. Six months after the election, the average was approximately 12.4%, with positive returns in all 13 periods studied.

Why? It may have less to do with who wins than with uncertainty beginning to clear. Before an election, investors are debating taxes, regulations, spending and campaign promises. Afterward, the future may not be clear—but it can become less unclear.

And 2026 Is Already Refusing to Follow the Script

Fidelity reports that the average midterm-year drawdown since 1961 has been about 19%. Yet through its August 2026 review, the SCP 500’s peak-to-trough decline for the year had been about 9%, while the index was up roughly 14% year to date by mid-August.

So even when we know the historical pattern, the market does not have to follow it.

One of my favorite investment strategies: stop trying to predict things you don’t need to predict.

Then There Is AI

If elections are producing anxiety, artificial intelligence is producing something different: FOMO.

Everyone wants to know: What’s the next NVIDIA? Is AI a bubble? Which company will dominate? Should I own more technology?

I am extremely bullish on the importance of AI. That does not mean every AI investment is attractive at every price. Those are two entirely different statements.

AAII asked its members about this in June 2026. About 36.3% said AI-related stocks were in a bubble. Another 51.5% believed at least some AI stocks were too expensive. Only 7.4% said there was no AI-stock bubble.

There is another AI risk investors should understand. The SEC, FINRA and NASAA have warned that AI- generated investment information can be inaccurate, incomplete, misleading or even fabricated. AI can sound incredibly confident while being incredibly wrong. I know a few humans who have that feature too.

Use AI as a copilot—not an oracle.

Use it to summarize, compare scenarios, identify questions and explain complicated concepts. Then verify the information and apply human judgment.

Six Things That May Matter More Than the Election

1.  What Return Are You Actually Keeping?

A 10% portfolio return does not necessarily mean you became 10% wealthier. Taxes matter. Fees matter. Inflation matters. Withdrawals matter.

The IRS’s 3.8% Net Investment Income Tax, for example, can apply to certain investment income once modified adjusted gross income exceeds applicable thresholds. Instead of asking only, “What did my portfolio earn?” ask, “What did I actually keep?”

2.  Are You Managing Taxes—or Just Filing a Tax Return?

Tax planning should happen throughout the year. Can losses be harvested? Should gains intentionally be realized? Does a Roth conversion make sense? Can a Ǫualified Charitable Distribution help accomplish charitable and tax objectives? Should appreciated securities be donated rather than cash?

For 2026, the federal estate and gift tax basic exclusion is $15 million per individual, while the annual gift-tax exclusion is $19,000 per recipient.

Are you trying to pay the least tax this year—or the least tax over your lifetime? Those are not always the same thing.

3. How Much Cash Is Enough?

Cash has important jobs: spending, emergency liquidity and opportunity. It can also prevent forced selling during market declines. But at some point, cash stops being a liquidity strategy and becomes a market- timing strategy.

The Federal Reserve’s longer-run inflation objective remains 2%, so long-term cash holdings also have purchasing-power considerations.

I like to give every dollar of cash a job: spending, emergency, opportunity or near-term purchase. If a large pile is left over labeled “I’m nervous,” that probably deserves a conversation.

4.  What Will You Do When the Market Drops 30%?

Not if markets become volatile—when. I would rather decide what we will do during the next major decline while markets are calm.

Panic is expensive. Preparation is boring. I’ll take boring.

5 Are You Managing Investments—or Managing Wealth?

Your investment portfolio is only one component of your financial life. Taxes, estate planning, insurance, liability protection, retirement income, charitable planning, beneficiary designations, family issues, business interests, lending, long-term care and legacy all matter.

I have seen beautifully managed portfolios attached to outdated estate documents. That is not comprehensive wealth management.

Here is my test: If something happened to you tonight, could your spouse or children find every important account, document, insurance policy and professional they need tomorrow morning?

6. Do You Know When You’ve Won?

Successful investors spend decades accumulating. Eventually, some reach a point where additional wealth is unlikely to meaningfully change their lifestyle. At that point, perhaps the question should change from “How do I maximize my return?” to “What is this money actually for?”

Morningstar’s latest retirement-income research calculated a 3.9% base-case starting withdrawal rate for a 30-year retirement with a 90% probability of funds remaining under its assumptions. That is not a universal rule, but it illustrates how retirement success depends on time horizon, asset allocation, inflation and spending flexibility.

The objective is not simply accumulating the largest possible pile of money. It is creating a financial strategy that supports the life you actually want to live.

Vote for Whoever You Want. Just Don’t Let Your Portfolio Vote.

November will arrive. Someone will win. Someone will lose. Approximately half the country will be happy. The other half will tell us civilization has approximately 15 minutes remaining.

Then Monday morning will come.

Millions of Americans will go to work. Companies will compete. Entrepreneurs will start businesses. Scientists will invent things. AI will continue evolving. Consumers will continue consuming. Businesses will continue trying to increase profits. And investors will continue owning pieces of those businesses.

That is why we are not interested in building financial plans around one election prediction—or around guessing the next AI winner. We would rather build around the things we can actually influence: taxes, diversification, liquidity, risk, retirement income, estate planning and behavior.

36 Years, Thousands of Families—and Plenty of Headlines

At Carver Financial Services, we have been helping individuals and families navigate their financial lives for more than 36 years. Over that time, we have had the privilege of working with thousands of people through some extraordinary markets—and some extraordinarily difficult ones.

We have seen bull markets and bear markets. Recessions and recoveries. The dot-com boom and bust. 9/11. The Global Financial Crisis. COVID. Inflation. Rapidly changing interest rates. Wars, political upheaval, presidential elections, midterm elections and more “once-in-a-lifetime” events than any of us would care to experience in one lifetime.

The headlines have changed. The lesson has not.

You cannot control the markets, Washington or what happens next. You can control how prepared you are.

Our job is not to pretend that we can predict every market move. It is to help our clients navigate the inevitable ups and downs, make thoughtful decisions when the world gets noisy, identify opportunities when they arise and keep their financial strategy aligned with the people and goals that matter most to them.

Technology—including AI—will continue to change how we analyze information and deliver advice. Tax laws will change. Markets will change. Political leadership will change. Life will change. The value of having a thoughtful plan, a disciplined process and people you trust to help navigate those changes remains incredibly important.

Prepare. Don’t Predict.

If the election goes the way you hope, your plan should work. If it does not, your plan should still work. If AI transforms the economy faster than anyone expects, your strategy should be able to adapt. If today’s market leaders disappoint, your financial future should not depend on one stock, one sector or one prediction.

The goal is not to predict Washington or the next NVIDIA. The goal is to build a financial strategy that can succeed across many possible futures.

If you have questions about your investments, taxes, retirement income, estate planning, portfolio risk—or simply whether all the pieces of your financial life are working together—we invite you to reach out to the Carver Financial Services team.

Sometimes the most valuable conversation is not about what the market will do next. It is about what you should do next.

We’re here to help you navigate what comes next.

Past performance does not guarantee future results. The SCP 500 is an unmanaged index and cannot be invested in directly. Historical election-cycle statistics are illustrative and should not be interpreted as forecasts. This material is for educational purposes only and is not intended as individualized investment, tax or legal advice. Investors should consult appropriate professionals regarding their individual circumstances.

Sources:

• Fidelity Viewpoints, “The Surprising Truth About Midterms and Stocks,” August 2026.
• Capital Group, historical election-cycle and long-term investing
• Charles Schwab, historical SCP 500 performance following midterm
• AAII Sentiment Survey, June 11,
• SEC / FINRA / NASAA, gov, “Artificial Intelligence (AI) and Investment Fraud: Investor Alert.”
• Internal Revenue Service, Topic 559, Net Investment Income Tax; Publications 550, 590-A and 590- B; Estate and Gift Tax FAǪs.
• Federal Reserve, Statement on Longer-Run Goals and Monetary Policy
• Morningstar, “What’s a Safe Retirement Withdrawal Rate for 2026?” December.
  

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Carver Financial Services manages more than $3.9 Billion in assets as of August 2026 for clients globally. You can contact Randy Carver personally at randy.carver@raymondjames.com or the full team at (440) 974-0808.

Opinions expressed are those of the author/speaker and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance may not be indicative of future results. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. The forgoing is not a recommendation to buy or sell any individual security or any combination of securities.