• Historically, on average, market volatility in US presidential election years has been higher than in non-election years.
  • Since 1990, there have been eight presidential elections, but as it turns out, just three of those years had above-average implied volatility levels: 2000, 2008 and 2020.
  • A closer look at the historical data shows that macroeconomic and market events appear to be the major driver of volatility in election years – just as in non-election years.
  • Above-average volatility in those years was seemingly driven more by systemic economic and financial system issues along the with stage of the business cycle at that time.
  • While there are no predictions here, there are some noted similarities between this year’s market environment and 2000, 2008 and 2020 – additional reasons for investors to remain vigilant and manage the risks in their portfolios.