Recently, while organizing information related to the U.S. presidential election, I found a rather interesting phenomenon—many people are actually not very clear about the basic fact that the U.S. presidential election happens once every few years.

In fact, the U.S. presidential election is held every four years, and this cycle has lasted for a long time. The election process is also relatively complex: from February to June is the primary season, during which the Democratic and Republican parties run primaries and caucuses to determine their candidates. In July and August, the two parties hold national conventions to finalize their presidential and vice-presidential candidates. Then comes the general election stage, where voters in each state cast their ballots. Finally, the outcome is decided through the Electoral College—538 electoral votes; whoever reaches 270 votes first wins.

What’s interesting is that the U.S. presidential election’s impact on the stock market is actually not as large as many people think. According to market data analyzed by Bank of America since 1930, some patterns can be found. In the year before an election, the stock and bond markets usually perform relatively weakly, and there can also be some volatility in the election year. However, the election results themselves have a comparatively limited effect on the market—when a new political party comes to power, the stock market rises by an average of 5%, and when the same president is re-elected, the increase is about 6.5%. It seems that the market cares more about policy direction than about who wins.

The real factor affecting the stock market is major policy adjustments. Changes in policies across four areas—fiscal, monetary, market, and trade—can directly affect the real economy and stock valuations. So rather than fixating on the candidates, it’s better to focus on where these policies are headed.

For investors, election years do bring more volatility, but that doesn’t necessarily have to be a bad thing. The key is to stick to your portfolio strategy, understand changes in macro policies, and make long-term plans while doing a good job of risk control. Instead of being frightened by the uncertainty of election season, it’s better to use market volatility to look for opportunities. Tools such as contracts for difference (CFDs), because they support two-way trading and relatively flexible position management, can indeed help investors respond to market changes more effectively during periods of high volatility. But regardless of what tools are used, the core still comes down to seeing the situation clearly and doing your own homework.