Why this is the one election investors can’t ignore

Does the result of a general election affect stock markets? This is a question asked by many investors, yet the answer has almost as many nuances.

As the country heads to the polls for the third time in four years, savers will be pondering the outlook for their portfolios. The reason for the subtleties is that there is no evidence of any concrete link between the occupant of Downing Street and investment returns.

This seems illogical: surely the government that sets economic policy should have an effect on whether stock markets go up or down? But figures suggest that factors outside government control are more important.

If we look at stock market performance under prime ministers all the way…