The Full Picture
Sharing stories and strategies on building businesses, investing capital, and the personal side of wealth
By Panoramic Capital Partners
Democrats have won notable majorities in both the House of Representatives and the Senate, with some ballots still being counted. The S&P 500 has experienced some volatility since Election Day but was effectively unchanged as of earlier this week. From our perspective, immediate market reactions are interesting but provide nothing actionable from a long-term planning viewpoint. In our early October note, we wrote that the open questions were how large the shift would be and what legislation might follow. What the election results change in Washington, D.C., what they do not, and what it means for long-term portfolio positioning is the focus of this note.
WHAT HAPPENED
Since 1934, the president’s party has lost seats in the House of Representatives in all but three midterm elections, by an average of 27 seats. That pattern directionally held, and this year’s midterm shift is larger than average. Democrats flipped 44 House seats and Republicans flipped 3, for a net shift of 41, leaving Democrats at 254 of the House’s 435 seats with around 20 races still uncalled. In the Senate, Democrats will hold 54 seats to 44 for Republicans, with Mississippi and Alaska still too close to call, though Democratic candidates currently lead both counts by very narrow margins.
WHAT CHANGES
Control of Washington, D.C. is now split. A bill will need approval in both chambers and the president’s signature, and overriding a veto takes a two-thirds majority in each chamber, a threshold the Democratic majorities do not currently cross. Most legislation needs 60 votes to advance in the Senate and Democrats will hold 54, which means Democrats will also need Republican votes for passage. This makes major new fiscal stimulus unlikely for the next two years.
Some analysts expect deals to be limited largely to must-pass measures such as annual government funding, which give Democrats leverage to seek changes to last year’s Medicaid cuts. Others see room for agreement on drug pricing and housing, helped by the strong showing of moderate Democratic candidates, who may be more open to bipartisan deals. Oversight investigations of the administration, which could extend to companies that have worked with it, may sour that appetite for cooperation.
For investors, this matters because changes to taxes, spending and regulation directly move corporate profits, federal deficits and economic growth. Fewer sweeping changes means fewer surprises and a steadier backdrop for long-term planning. A Democratic Senate will also have more say over presidential appointments, including nominees to the Fed, which could ease some concerns about the Fed’s independence.
The debt limit is the clearest recurring headline. The Bipartisan Policy Center estimates the government will reach the limit in early to mid-2027.1 Pimco’s head of public policy sees two paths: one in which the fight is not a volatility event because both sides find common ground on spending, and another in which each side overplays its hand and volatility builds into the so-called X date, the point at which the government could no longer pay all of its bills, in mid to late 2027.2 Other strategists note that Democrats could use the debate to seek concessions on healthcare, tariffs or the Iran war, and past standoffs have produced bouts of volatility.
AI AND CONCENTRATION
The AI buildout is a clear point where policy and markets intersect. Analysts at J.P. Morgan expect it to stay on track but become costlier, slower and more consolidated,3 and several other strategists see a similar risk of delays. Data centers need local approvals for land, power and water, and those decisions are made by states, utility regulators and zoning boards. Tougher rules, such as water-use limits or requirements to pay for grid upgrades, add cost and time, and the best-capitalized companies are better able to absorb both. A federal restriction would likely face a presidential veto, so restrictions are more likely to come from state and local governments than from Washington. Voters favored greater restrictions in nearly every data-center measure on the November ballots, and several newly elected Democratic governors campaigned on limiting data centers in states with significant planned capacity. Some strategists estimate that most of the 37 gigawatts of capacity expected in 2027 is already under construction, so any slowdown would show up later.
This helps explain part of the volatility in chip and data-center stocks after the election. The Nasdaq Composite had already fallen about 8% from its early October record by Election Day, and market reports and strategists also pointed to long-running questions about borrowing costs, valuations, heavy capital spending and whether future returns will justify it, and when.
INTEREST RATES
Interest rates remain the larger variable. In the last two midterm years, 2018 and 2022, the S&P 500 ended each year lower, with rising rates causing both declines. Inflation, driven largely by gasoline prices tied to the war in Iran, is above the Fed’s 2% target, and markets are currently pricing a high probability of another increase at the Fed’s December meeting. That is why rates, more than the election, will shape our thinking about portfolio positioning in the months ahead.
WHAT REMAINS THE SAME
The partisan rhetoric of an election year and the long-term results of a portfolio have very little to do with one another. Financial goals, time horizon, diversification and the discipline to rebalance were the same the day after the election as they were the day before, and they remain the foundation of a successful long-term financial plan.
Market declines are a normal part of investing. Capital Group studied market declines going back to 1954 and found that the S&P 500 falls 10% or more about once every 18 months and 20% or more about once every six years.4 Those declines arrive on their own schedule and pay little attention to the political calendar.
The longer record is very encouraging, though it is not guaranteed. In each of the 19 midterm elections since 1950, the S&P 500 was higher 12 months later, with an average gain of about 15%. Even the weakest, about 1% after the 1986 midterms, a stretch that included the October 1987 market crash, was positive, and the strongest, after 1954, was about 33%.
FOR INVESTORS
Our view continues to be that investment objectives and time horizon, not the political calendar, should drive investment decisions, and four things follow.
First, anchor to the Capital Sufficiency Analysis behind your plan, which helps define how much risk is needed to fund your goals. That, not post-midterm headlines, should be the basis for portfolio positioning decisions. Rebalancing portfolios after a drift from target allocations is another key tenet of a successful strategy.
Second, if you rely on portfolio withdrawals to meet lifestyle spending, hold enough cash and equivalents to fund spending through a significant and sustained downturn. That helps to ensure you avoid a position of having to sell stocks during a decline.
Third, look at where your portfolio is concentrated. Exposure to a single sector or theme, such as the AI trade, can build quietly through individual stocks, company equity and funds that hold many of the same companies. The ten largest companies now make up nearly 40% of the S&P 500, and Nvidia alone is about 8% of it, so a broad index fund can carry more exposure to a handful of AI-linked companies than its name suggests. A portfolio can look diversified across accounts and still carry more exposure to one investing theme than you intended.
Fourth, consider asset classes that have historically traded with low correlations to both stocks and bonds. Although diversification does not ensure against loss, maintaining exposure to them can help smooth returns and often reduce overall portfolio volatility.
FOR BUSINESS OWNERS
For business owners, similar principles apply. Timing a sale or a liquidity event around the political calendar is hard to get right, and it is rarely the deciding factor. Buyers pay for earnings they believe will endure, so the factors that carry more weight are closer to home: how durable those earnings are, the business’s reliance on the owner or customer concentration, the depth of the management team, and what the proceeds are intended to fund.
Interest rates deserve more attention than the election. Many acquisitions are financed with debt. Higher rates raise buyers’ borrowing costs, which can reduce what they are willing to pay and make financing harder to secure. With another increase looking likely at the Fed’s December meeting, owners considering a sale should test their valuation assumptions against the potential for a higher cost of financing.
For executives of private equity-backed companies, much of their net worth can be tied to the equity of one company, which can be difficult to sell on a schedule. We plan around the vesting and liquidity events themselves: how proceeds will be diversified, what tax comes due and when, and how the rest of the portfolio should be positioned beforehand, working alongside your CPA & attorney.
Our NorthStar Value Creation System is the framework we use to bring a business owner’s goals into one picture: what the business needs to achieve, what the owner and family need from it, and how the two work together. From there we identify the value drivers that move the business toward that target, the strategic initiatives that act on them, how progress is reported, and how capital is allocated between reinvestment, distributions and personal wealth.
If any of this raises a question about your own situation, we welcome the opportunity to connect when the time is right for you.
Panoramic Capital Partners
SOURCES
- Bipartisan Policy Center, “When Will We Reach the Debt Limit (Again)?,” June 4, 2026.
- Libby Cantrill, PIMCO, “With Echoes of 1974, a Decisive Victory for the Democratic Party,” November 2026.
- J.P. Morgan Asset Management, “What Does a Democratic Congress Mean for Markets?,” November 4, 2026.
- Capital Group, “How to Handle Market Declines,” S&P 500 Index, 1954 to 2025. Declines are price declines, excluding dividends, and average frequency assumes 50% recovery of lost value. Sources: Capital Group, RIMES, Standard & Poor’s.
DISCLOSURES
The S&P 500 Index is an unmanaged, market capitalization-weighted index of approximately 500 widely held common stocks. The Nasdaq Composite Index is an unmanaged, market capitalization-weighted index of most of the common equities listed on The Nasdaq Stock Market. Investors cannot invest directly in an index. Index results do not reflect the deduction of fees or expenses.
Panoramic Capital Partners is a registered investment advisor.
The information provided is for educational, informational, and illustrative purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. Panoramic Capital Partners and its advisors do not provide legal, accounting, or tax advice. You should consult your attorney or tax advisor.
The views expressed in this commentary are subject to change based on market and other conditions. This article may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
Past performance is no guarantee of future returns. Diversification does not ensure against loss.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
Views and research attributed to J.P. Morgan, Pimco, Capital Group, the Bipartisan Policy Center and other third-party sources are those of the respective firms and organizations and not of Panoramic Capital Partners.
Advisory services are only offered to clients or prospective clients where Panoramic Capital Partners and its representatives are properly licensed or exempt from licensure.
IMPORTANT DISCLOSURES
Panoramic Capital Partners LLC (“Panoramic”) is a Registered Investment Adviser.
This content is intended to provide general information about Panoramic. It is not intended to offer or deliver investment advice in any way. Information regarding investment services are provided solely to gain an understanding of our investment philosophy, our strategies and to be able to contact us for further information.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
Past performance is no guarantee of future returns. Diversification does not ensure against loss.
Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable.
Panoramic Capital Partners LLC, its affiliates, and its employees are not in the business of providing tax or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.
This material is provided for educational and informational purposes only. It is not intended to be an offer, solicitation, or recommendation with respect to the purchase or sale of any security. The views expressed in these educational and related publication(s) contain the judgment of the author(s) as the publication date is subject to change without notice.
All illustrations contained here are hypothetical, are provided for educational purposes only, and do not represent the performance of any actual account, portfolio, or strategy. Hypothetical illustrations have inherent limitations and are not a guarantee or projection of future results.
Private real estate and private infrastructure funds involve substantial risk and are suitable only for investors who can bear the loss of their entire investment. Such funds are semi-liquid rather than liquid: they offer periodic repurchase at the discretion of the board or adviser, subject to program caps, potential suspension, and early-redemption holdbacks, and an investor should not assume shares can be sold when desired. They may carry higher fees and expenses than publicly traded alternatives, may employ leverage, and provide less frequent valuation and less transparency than listed securities. Distributions are not guaranteed, may be funded from sources other than operating cash flow, and may be reduced or suspended. Availability is generally limited to investors meeting applicable eligibility standards. Any investment should be made only after review of a fund’s prospectus or offering documents, which contain complete information regarding risks, fees, liquidity terms, and tax treatment.
Additional Important Disclosures may be found in the Panoramic Form ADV Part 2A online.
Panoramic Capital Partners (“Panoramic”) is a registered investment advisor.
The information provided is for educational, informational, and illustrative purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. Panoramic Capital Partners and its advisors do not provide legal, accounting, or tax advice. You should consult your attorney or tax advisor.
The views expressed in this commentary are subject to change based on market and other conditions. This article may contain certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
Advisory services are only offered to clients or prospective clients where Panoramic and its representatives are properly licensed or exempt from licensure.
The above targets are estimates based on certain assumptions and analysis made by the advisor. There is no guarantee that the estimates will be achieved.