Dear Mr. Market:

If the stock market has felt a little more unpredictable lately, there’s a reason to pay attention to the calendar. We’re heading into another midterm election cycle, and history suggests that the second year of a presidential term is often the most volatile stretch of the four-year political cycle.

That doesn’t necessarily mean investors should run for the exits. In fact, the historical data tells a much more interesting story: midterm years have often brought deeper market pullbacks and weaker returns, but the twelve months following midterm elections have historically been among the strongest periods of the presidential cycle.

With the 2026 midterms approaching, it’s worth taking a closer look at what history tells us, what it doesn’t, and why investors should be careful about confusing volatility with danger.