History shows there is little correlation between elections and market performance.

The year 2024 is the year of elections in at least 64 countries and South Africa takes its turn this week, with nearly 28 million voters heading for the polls on 29 May.

For the first time since South Africa's first democratic elections in 1994, the outcome is not predictable. This election uncertainty can easily cause investors to make rash decisions in reaction to the current climate and perceived market swings. However, the investment experts are all in agreement. Regardless of the political environment, they recommend holding your investment course for the long term.

Marise Bester, investment specialist at Allan Gray, acknowledges that there is "above-average" political risk this year, but she adds that it is a true reflection of a healthy democracy.

Sangeeth Sewnath, deputy managing director at Ninety One, points out that a review of history shows little correlation between elections and market performance.

"The evidence supports the theory that markets perform better after elections given the risk aversion beforehand," he says.

What history tells us

Looking at the performance of the FTSE/JSE All-Share Index (ALSI) over the past 30 years, there have only been five years in which the index reported a negative return (1997, 1998, 2002,...