Don’t stress Starmergeddon – Labour will usher in a market rise

Still not convinced? Here’s the data: in the years of a Republican US presidency win, returns have averaged 15.2pc since the S&P 500 began in 1925, 5pc above its long-term average. However, the following year, in the president’s first year, returns averaged only 2.6pc.  

Conversely, in years when Democrats won the presidency, the S&P 500 averaged 8.2pc, but skyrocketed the next year to 17.2pc. Seems perverse. Runs inverse.

It works perversely here, too – just less clearly – due to not having a regular election cycle. British stocks have routinely benefited from positive surprise when global investors realise Labour governments achieve less than was feared pre-election. 

In the 12 months after elections that created Labour-led governments since 1923, the FTSE All-Share’s median return is 12.5pc – well above Tory governments’ 7.8pc. Simple fact.  

Ignore all the epic fear-mongering, warnings of draconian wealth taxes or capital gains tax hikes, North Sea oil fading and, at best, anaemic growth and flatlining productivity. These fears aren’t new. They reigned when Ed Miliband led Labour. Jeremy Corbyn, too. Same now, different faces. 

There’s been plenty of time for investors to have already chewed the implications to death. If markets are even slightly efficient, it is all pre-priced. After all, polls have long foretold a big Labour win.