For all the deep and thoughtful analysis of how a changing congressional landscape will affect the economy and markets, some investors are turning to a very simple strategy to profit from the midterm elections: Buy an index fund!
There's a reason why investors salivate when midterm elections cycle through. It's been a very bullish catalyst for the markets, and has been for decades. According to Chief Equity Strategist Sam Stovall of S&P Capital IQ, the seasonality associated with midterms has brought positive returns for the stock market a lot more than it has brought losses. Stovall notes that since 1946, there have been 17 midterm election years. On average, the S&P 500's return between Oct. 31 of the midterm year and Oct. 31 of the following year has been an eye-popping 17.5 percent. What's even more staggering is how many times the index has produced a positive return … 17.