Subscribe to the Yellowhammer Radio Podcast on iTunes. Learn more about Jeff Roberts’ private wealth advisory practice at JeffRobertsAndAssociates.com.

Billionaire Hillary Clinton supporter Mark Cuban predicted Wednesday that “the market [will] tank” if Donald J. Trump is elected president, and while he did not offer any evidence to support his prediction, Mr. Cuban revived a long-running debate over which Party is better for investments.

Birmingham, Alabama-based financial guru Jeff Roberts, who was recently named to Barron’s® 2016 “Top 1,200 Advisors: State-by-State Ranking,” came on Yellowhammer Radio Tuesday to break down the historical data.

“The single most common question I have heard in the last month or two when clients come in is ‘how will the presidential election impact markets?” Roberts told host Cliff Sims. “There are a couple things investors need to remember. First, the president doesn’t really determine those market returns. Markets are highly complex — they have a lot of moving parts — so just a presidential election or a Party probably does not have a huge impact. The policies seem to matter more than the presidential Party itself, and policies are tied more heavily to the composition of Congress, probably more so that the presidency.”

Data Mr. Roberts gathered from the Wells Fargo Investment Institute shows how little the Party holding the presidency seems to change the trajectory of financial markets. In fact, the historical data is so inconclusive, it is actually different depending on whether we start measuring on Election Day, or wait until Inauguration Day.

If we argue that a president-elect’s impact on the market begins on Election Day, with the markets anticipating what he will do once in office, historical data says Democrats average a 9.22% return in their first year, while Republicans only average an 8.11% return. However, if we argue that a president’s impact on the market doesn’t really begin until the day he takes office, Republicans outperform Democrats 8.59% to 8.33%. Those numbers are based off of market returns from 1856 to 2014, a 158-year period.

Mr. Roberts then went a step further and gathered data on how the markets perform under different scenarios of presidential and congressional control.

“For example, back when Democrat Bill Clinton was president and Republicans, led by Newt Gingrich, controlled the House,” he explained, “they balanced the budget and paid down debt and we had a technology boom, and the markets performed tremendously well.”

The two scenarios that produce the highest returns historically are when a Democrat is president and Congress is under split control, and when Republicans have full control of the presidency and both chambers of Congress.

Here are the average annual inflation-adjusted total returns for the S&P 500 Index, depending on the Party composition of the executive and legislative branches:

Presidency / Congress / Market Performance
Democratic / Democratic / 8.35%
Democratic / Split / 11.26%
Democratic / Republican / 9.99%
Republican / Democratic / 7.92%
Republican / Split / 2.25%
Republican / Republican / 10.75%

In one final calculation, Mr. Roberts researched how the markets perform, depending on which Party is transitioning out of controlling the presidency, and which Party is transitioning in.

Here’s what he found:

In summary, Mr. Roberts said the data is fascinating to look at, but probably does not provide any actionable insight.

“The S&P index returns during Democrat and Republican administrations is of no value to investment making decisions,” he concluded. “In our opinion there’s just nothing about it that tells you buy or sell. There is no clear forecast for investors to use when benchmarking history. There’s interesting data, it’s fun to look at, but I don’t think it causes anyone to adjust their portfolio… Vote, but don’t let your politics affect your portfolio.”

Check out Jeff Roberts’ full interview on Yellowhammer Radio in the video above. For more information on his private wealthy advisory practice, visit JeffRobertsAndAssociates.com.

RELATED: Alabama financial pro gives fascinating insight into what presidential race means for investments

(Video above: Cliff Sims interviews Jeff Roberts)

The financial markets don’t like uncertainty, and few things create more uncertainty than an open presidential election.

With that in mind, Yellowhammer Radio host Cliff Sims on Wednesday interviewed Jeff Roberts, who he called “the most knowledgeable and exceptional financial professional I know,” to get his take on what the presidential election means for investments.

A lightly edited transcript of their conversation can be found below. The full interview can be heard in the video above.

Subscribe to the Yellowhammer Radio Podcast on iTunes. Learn more about Jeff Roberts at JeffRobertsAndAssociates.com.

What does the U.S. presidential election mean for market volatility? Is there any data on the performance of the stock market during election years that we can look back on?

There is. Our good friends over at the Wells Fargo Investment Institute did a report back in February of this year and it gives some insights about the S&P 500 index and election years dating back from 1933 until 2014.

(…)

If you look at the years when there is an open election, verses a re-election, the performance was dramatically different.

An open election is what we have right now — the election is going to result in a new president being named, period, not matter what. The previous president is not running; it’s new candidates altogether.

A re-election is what we had four years ago; a sitting president running for re-election.

If you look at the re-election years, the performance of the stock market, not including the reinvested dividends, is 9.7% on average. But when you look at the open election years the rate of return is 1.2% on average. There is a dramatic difference between those two.

What is it that causes that much of a deviation between open and re-election years?

It’s anybody’s guess.

Generally speaking, the markets don’t like uncertainty. When you’re looking at an open election year, obviously there’s a lot more uncertainty… That’s reflected in the markets performing worse during open elections than in the re-election years.

For folks who have their retirement accounts or other investments and are finding out now that, historically, we can expect a low rate of return during an open election year and that there may be a lot of market volatility, what should they do with this information?

Keep in mind the classic statement you hear people like me say: “past performance is no indication of future results.” But it does provide very important information. Information is what we use to help people make good decisions.

So with this information, broadly speaking, you can’t give advice and say “oh investors need to do this or do that,” but consider the time frame of the investment horizon you’re looking at.

If you’re looking at a long-term retirement portfolio, then you’re likely not going to be worried about the short term volatility of the election this year.

But if you are looking at an amount of money that you might have sitting in cash and you’re thinking about entering the market, then this could be helpful.

The study plots out every year since 1933, and the historical trend shows the markets typically peak around July and August in open election years, then start to decline in September and October.

That doesn’t mean people need to run out of the markets, but if you are sitting on cash, it’s information that you can use to determine what to do. It depends upon each persons unique situation. But again, this is information. Use it wisely.

Everybody listening can tell how knowledgable Jeff is on this stuff. If you’re interested in talking to Jeff a little bit more about he and his team can help you out, you can go to JeffRobertsAndAssociates.com.