Republican or Democrat, everyone should take comfort in the election aftermath for one reason, according to billionaire investor Ray Dalio: A decisive outcome is good news for markets.
“All Americans should be happy that we will have an orderly transfer of power,” the Bridgewater Associates founder said in a Wednesday LinkedIn post. “Whew! That’s a great risk reduction.”
Stocks typically rise after U.S. presidential elections, and this year was no exception, with the Dow soaring over 900 points in the early hours Wednesday following Tuesday’s closely watched election. The stock surge resulted in the top 10 richest people in the world amassing an additional $64 billion for themselves.
But Dalio’s worry about the markets’ health was founded in the reverberations of the 2020 presidential election, which saw now president-elect Donald Trump ardently deny Joe Biden’s victory. The lengthy period needed to count the votes after an influx of pandemic-necessitated mail-in ballots fueled Trump’s erroneous argument that absentee and mail-in ballots were fraudulent, resulting in Trump stoking an insurrection led by his followers in the U.S. Capitol building on Jan. 6, 2021.
This year’s election aftermath had a markedly different tone. After Trump was declared the winner of the presidency, Vice President Kamala Harris conceded the election to him, broaching in a Wednesday phone call the importance of a peaceful transfer of power.
Prior to the election, Dalio—who had dubious confidence in both major presidential candidates—admitted concerns on the possibility for this orderly transfer, especially should Trump lose the election, during the FutureChina Global Forum in Singapore on Oct. 18.
“If it’s a close Trump loss, I would say it’s almost an even probability,” Dalio said. “[But if] Trump wins, it’s a different story. So I would say, if you put the two together, maybe a one in three.”
Dalio did not respond to Fortune’s request for comment.
Other business leaders sighed in relief after the election for the same reasons as Dalio. Jim McCann, founder and chairman of 1-800-Flowers.com, said a decisive election means consumers won’t be distracted by discourse over fraud that dominated 2020’s aftermath.
“As a retailer, particularly the retailer of a lot of gifts for the Thanksgiving and Christmas holidays, if this caused distractions—very selfishly, that would’ve damaged our business,” McCann said.
What happened to the markets on Jan. 6?
Despite Dalio’s clear concerns on the impact a contested election would have on the market, history tells a different story. On Jan. 6, 2021, the Dow reached 31,000 points for the first time in its history, trading up 1.4% and over 430 points at day's end, buoyed by investors’ hopes a Biden victory would increase the likelihood of government aid.
The market’s behavior follows similar patterns from past foundation-shaking moments in U.S. history: In the year following president Bill Clinton’s 1998 impeachment, the market rose almost 40%. Similarly, about a year after president Richard Nixon’s Watergate scandal and August 1974 resignation, stocks rallied nearly 50%.
The resilient—even flourishing—markets in the face of political uncertainty comes from the philosophy that investors don’t care about the present, but are rather concerned with a prognosis for the future. While civil unrest is generally viewed as short lived, a new presidency offers possibilities of economic policies that stand to help Wall Street.
“The market is agnostic about politics,” Marc Chandler, chief market strategist for Bannockburn Global Forex, told the Washington Post in 2021. “We like to think democracy is better. But at the end of the day, investors don’t seem to care so much about that.”
