Goldman: Around the past 10 midterm elections, US mutual funds increased their cash holdings by an average of 0.4% of AUM during the 3 months before the elections and then reduced those cash positions by 0.6% during the 3 months post-election. Similarly, foreign investors on average sold 0.1% of their US equity assets during the 3 months before the election and then added 0.5% during the subsequent 3 months.

During midterm election years of the past few decades, the S&P 500 has generated a median return of 0% from the start of August through Election Day. Returns have typically improved as uncertainty subsided post-election, with the S&P 500 returning a median of 6% in the subsequent 3 months.