Investors should resist the urge to sell retirement holdings in reaction to the latest shift in Washington, according to financial commentator Ted Jenkin. Democrats have taken control of both the House and the Senate, while Donald Trump remains president, creating a divided government that has become a source of anxiety for many savers. Jenkin argues that the political result should not drive decisions about long-term portfolios, and that investors who act on fear risk locking in losses at the wrong moment.
Jenkin points to historical data to make his case. Since 1953, the S&P 500 has averaged a 4.9% annual price return during periods of divided government, meaning a Republican president paired with a Democratic Congress. That figure reflects price movement only and excludes dividends, which Jenkin notes are a meaningful part of total returns for long-term investors. The data, drawn from the period running through 2025, shows that markets have continued to grow across many different political configurations.
Research cited alongside Jenkin's column points to a similar pattern around midterm elections. Capital Group found that since 1950, the S&P 500 has averaged a 15.4% gain over the 12 months following a midterm vote, and every 12-month period after a midterm in that study was positive. Political configuration data referenced in the column draws on work from RBC Wealth Management and Bloomberg, which track how control of the White House and Congress has shifted over time.
The column offers an explanation for why markets often respond well after elections, even when the outcome is unwelcome to some investors. Markets tend to dislike uncertainty and prefer to know the results, so the period after a vote can bring a measure of stability. Jenkin also notes that divided government makes it harder to pass major tax and spending legislation, which can limit sweeping policy changes that might unsettle businesses and investors.
Jenkin argues that corporate earnings, inflation and interest rates drive stock returns far more than partisan control of Congress. He acknowledges, however, that the national debt, now above $40 trillion, remains a serious concern for the long term. Rising debt is an issue that investors across the political spectrum watch closely, and Jenkin treats it as a reason for vigilance rather than a reason for panic.
Jenkin is careful to stress that historical averages are not predictions. Past patterns do not guarantee how the market will perform in 2027 or beyond, and no single political outcome can be relied on to produce a particular return. His central message is that emotionally driven selling can cause investors to miss recoveries, and that decisions anchored to a long-term plan are more likely to serve retirement goals than reactions to headlines.