Some of my clients are, politically speaking, on the left. Others are on the right. When Barack Obama was elected some conservative clients wanted to sell stocks. Then when Donald Trump became president the liberals wanted out.

The truth is ordinary people care more about politics than investors do. The worst traders are those that make buy and sell decisions based on politics.

When Trump was elected, some saw that as a buying opportunity for oil and steel stocks and a selling opportunity for solar. But during his four years oil and steel stocks badly lagged and solar soared. The Invesco Solar ETF (TAN) rose 275% under Trump while Market Vectors Steel ETF (SLX) was unchanged.

After Biden was elected, I wrote to ignore analysts recommendations for “Biden” stocks. Thank goodness. Since his election Invesco Solar is down 11% while Market Vectors Steel is up 93% and iShares Oil & Gas Exploration & Production ETF (IEO) is up 128%.

According to CFRA, the best performance has historically come when a Democrat was president with a split congress. There is a caveat, however. That only happened during the Obama presidency. That’s not much history, but the Dow gained 13.6% annually during that time. A Democrat president with a Democrat congress produced a 4.9% annual return.

Still, policy matters. Stock prices are linked to corporate earnings, not political factors, specifically to after-tax corporate earnings. If corporate taxes increase then profits would suffer and there would be less to pay as dividends to stockholders. It makes for a difficult year-over-year comparable should that happen.

Politics or not, stocks advance over the long run. Historically, the market rises after an incumbent president is re-elected. The market also rises when the incumbent loses. After every bear market there is a new high … eventually. That’s why most investors should own low-cost broad-based index funds. They shouldn’t be swayed by the “Sell in May and go away” philosophy.

Since 1925 the market has advanced between May and the end of October in 69 of 95 years. Over the last 10 years the market has advanced 80% of the time during the May through October period.

There are two elements to stock prices. Earnings and the value investors put on future earnings discounted to the present. Analysts are looking at S&P earnings this year of $200 or so, which puts the market’s P/E ratio at 20 times earnings. That’s no bargain. But then again there is also no alternative.

David Vomund is an Incline Village-based Independent Investment Adviser. Information is found at http://www.VomundInvestments.com or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial advisor before purchasing any security.