Editor's note: Presidential elections can boost your portfolio...

Most investors are reluctant to embrace the uncertainty that comes with putting their money to work amid a looming presidential election. But according to Stansberry Research analyst Sean Michael Cummings, history shows a strong January during an election year – like the one we experienced this year – signals a massive year ahead for stocks...

That's why he believes you need to ignore this year's bleak political backdrop in order to avoid missing out on huge returns in the long term.

In today's Masters Series, adapted from the January 8 and February 5 issues of the free DailyWealth e-letter, Sean explains why election years tend to scare off investors... details how history shows the presidential election is actually a bullish signal... and reveals how the market's strong performance in January is a positive sign for the rest of 2024...

The Election Rally Is Off to a Strong Start

By Sean Michael Cummings, analyst, DailyWealth

The 2024 election looks like it will be quite the slog...

As of last month's polling data from ABC News' 538, 55% of Americans hold an unfavorable opinion of President Joe Biden. Meanwhile, 52% of Americans feel the same about former President Donald Trump.

In other words, the majority of voters prefer neither candidate. But that's not how American democracy works...

The election will proceed. And come November, one of these two men will almost certainly be the winner.

When it comes time to cast ballots, voters will likely choose their "least bad" option. It's a bleak political backdrop. And you might expect this to drain investor sentiment, too.

Election cycles are all about change. So it makes sense to assume elections cause wild stock volatility...

After all, democracy breeds uncertainty. It can lead to surprise regime changes – and even civil conflict. And that may make 2024 feel like a dangerous time to invest...

But in reality, the 2024 bull market is running strong.

Let me explain...

When it comes to elections, it doesn't get any bigger than the U.S. presidential campaign. It's a relentless flood of media coverage every four years.

The last time Americans went to the ballot box was for the 2022 midterm election. But a few days before polls opened, the U.S. Department of Homeland Security, FBI, National Counterterrorism Center, and Capitol Police issued the following bulletin...

We assess some [domestic violent extremists] motivated by election-related grievances would likely view election-related infrastructure, personnel, and voters involved in the election process as attractive targets – including at publicly accessible locations like polling places, ballot drop-box locations, voter registration sites, campaign events, and political party offices.

Thankfully, no election-day violence came to pass. But this bulletin shows just how much risk an election can incur...

So, if you're worried that election years pose a threat to your portfolio, I'd understand that logic. However, history shows that isn't the case.

To prove this, I measured how stocks performed in every election year going back to 1928.

There have only been 24 elections since then. But stocks tend to hold up well in election years. Take a look...

Since 1928, stocks have returned about 6% a year. That's no different in election years... But there's a little more to this story than meets the eye.

First, stocks tend to underperform in the first three months of an election year. So if stocks fall throughout March, history suggests that's a buying opportunity and not a sell signal.

Second, it's worth noting that elections are reliably bullish. Stocks were positive in 20 of the past 24 election years... resulting in a strong win rate of 83%.

The data tells us that the biggest elections of all tend to be great news for stocks.

And the market rally already passed a critical test of resilience in January... which points to a positive year ahead.

January tends to act as a "bellwether" month. A good return in January correlates to a good year for stocks, and vice versa.

Stocks rose about 2% in January. This performance is already a positive sign for the market... But according to history, we should be especially bullish after a strong first month in an election year.

Elections and a strong performance in January are each bullish for stocks. But I wanted to see what happens when you have both in the same year...

To test this, I found the one-month returns for every positive January in an election year going back to 1928. Then, I measured what the market returned over the next year.

The results were overwhelmingly bullish. Take a look...

The U.S. has had 24 election years since 1928. And 11 of those had a positive January return...

In every case, January gains led to higher stock prices a year later. And more often than not, the market outperformed, too...

Stocks return an average of about 6% a year with a typical buy-and-hold strategy. But the average return soars to 11% when you buy after a strong January in an election year. And 73% of the time, stocks return double-digit gains.

In short, January's performance spells a big year for stocks.

Don't let this year's political scene get you too shaken up. History shows stocks are likely to surge after the dust settles – regardless of the outcome.

Good investing,

Sean Michael Cummings

Editor's note: It's not all good news with this election... Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – predicted the 2020 and 2022 crashes, 2021 bull run, and last year's historic banking crisis. And he just stepped forward to reveal what's coming next for the stock market throughout this election year...

Marc recently hosted an online presentation to sound the alarm about the one move you must make before Super Tuesday primaries in order to protect your portfolio. Plus, he shared the name of the No. 1 stock you must buy ahead of the presidential election. Catch up on the full details here...