Investors with a long time horizon may find that now is an opportune moment to buy stocks, as historical data indicates a general upward trend for the S&P 500 index. Even investors who purchased an S&P 500 exchange-traded fund (ETF), such as the Vanguard S&P 500 ETF, just before a market downturn would likely see positive long-term returns, especially through strategies like dollar-cost averaging.

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Current market conditions suggest that this is one of the best times to invest. Analyzing data segmented by election cycles, the strongest investment periods are the fourth quarter of the second year post-midterm elections and the first two quarters of the third year—starting this October.

According to Carson Research, since 1950, the S&P 500 has finished higher in the fourth quarter after a midterm election over 84% of the time, averaging a return of 6.6% during this period. The first quarter of the following year is historically even stronger, with stocks rising nearly 95% of the time and averaging a 7.4% gain. The second quarter of the third year has shown positive returns approximately 74% of the time, with an average gain of 5%.

Fidelity's research complements these findings, revealing that the S&P 500 has gained in 95% of the 12 months following midterm elections since 1938, and showing an average 14.5% return from November to November since 1950. Market performance appears resilient regardless of which political party is in power, with the biggest boosts often occurring when political uncertainty is reduced.

The Carson Group's analysis highlights that a split Congress tends to favor stock performance. Since 1951, the S&P 500 has averaged a 17% annual return during years with a Democratic president and a split Congress, and a 13.7% return in years with a Republican president and a split Congress.

While historical data can inform investment decisions, it does not guarantee future outcomes, suggesting that this might be a favorable time to enter the market. For broad exposure, investors might consider using index ETFs as core holdings, which provide instant diversification without the complexities of selecting individual stocks.

A J.P. Morgan study revealed that from 1980 to 2020, 66% of stocks underperformed the market, with 42% showing negative returns. This performance was largely driven by a small percentage of high-performing companies within the market.

Recommended ETFs include the Vanguard S&P 500 ETF, known for its low expense ratio of 0.03%, and the Invesco QQQ Trust, which tracks the tech-heavy Nasdaq-100 index with a 0.18% expense ratio. Both funds have historically delivered solid returns, with the Vanguard ETF averaging 15.3% annually over the last decade and the Invesco QQQ achieving a yearly return of 20.8%.

Investing with a dollar-cost averaging approach into these two funds could position investors for long-term success, regardless of the market's behavior in the post-midterm election period.