Member Highlight
Two Elections, One Week: What the Ballot Box Really Means for Your Portfolio
As Israel and the U.S. head to the polls, decades of market data show why certainty matters more than who wins
Editor’s Note: This article was written on October 19, 2026, ahead of Israel's Knesset election on October 27 and the U.S. midterm elections on November 3. Market figures reflect research available at the time of writing. Genesis BH is nonpartisan and takes no position on any party or candidate. Our aim is to help members think clearly about markets, not to comment on politics.
In the space of eight days, two of the democracies that matter most to our members go to the polls. Israelis vote for the 26th Knesset on October 27, and Americans head to the midterms on November 3. For an investor community that lives between Miami and Tel Aviv, that is a lot of headlines, a lot of opinions and, understandably, a lot of questions. The most common one we hear: Should I be doing something with my investments before the votes are counted? History offers a surprisingly calm answer. Elections move markets, but rarely in the way the noise suggests, and almost never for as long as the noise lasts.
Markets don't vote for a party. They vote for certainty.
Israel: the market prices the deadlock before the vote
This year's Knesset election is unusual on its own terms. It is the first time since 1988 that a Knesset has served its full four-year term, and official results are expected around November 4. Polls describe a race too close to call. The Tel Aviv Stock Exchange's own research unit recently looked at the ten Israeli elections since 2003 and found a clear pattern:
- • Before inconclusive elections, the TA-125 index fell by an average of about 5.3% over the preceding three months.
- • Before elections that produced a stable government, the decline averaged just 0.2%.
- • Within roughly five months after the vote, returns in the two scenarios were almost identical.
In other words, the market does its worrying in advance. Local stocks slipped in early October and underperformed global markets, which TASE economists read as investors bracing for a possible stalemate and even another round of voting. By election day, much of that risk is already in the price.
Longer-term research points the same way. Studies covering more than 60 years of Israeli elections have found that stock returns were, on average, higher in the period after elections than before them. And Israel's market has shown remarkable resilience through far bigger shocks than a ballot: in the Hebrew year that just ended, the TA-35 gained roughly 40%, well ahead of the S&P 500.
Israeli investors also have a particular reason not to over-read political drama. Since 1999 the country has held more than ten general elections, including four in two years. Many local market veterans have long argued that the economy, led by its private and tech sectors, responds more to global markets, inflation and interest-rate decisions than to who sits in the Prime Minister's office.
The U.S. midterms: a weak year, then a strong one
On the American side, the pattern is just as well documented, and it has a twist.
- • Midterm years have historically been the weakest of the four-year presidential cycle. BlackRock's analysis puts average midterm-year gains in the single digits, below both presidential-election years and non-election years.
- • The 12 months after a midterm have been the strongest. Since 1874, the S&P 500 has risen in the year following 32 of the last 38 midterm elections, gaining about 14% on average.
- • The turn often comes early. Markets have historically begun to rally around a month before Election Day, as polling gives investors a clearer sense of the likely outcome.
2026 has already broken the mold somewhat. Fidelity notes that U.S. stocks have held up this year despite worries about oil prices, tariffs and possible rate hikes. That is a useful reminder: the election calendar is one input, not a forecast. As Fidelity's strategists put it in plain terms, elections have been a supplementary driver of returns, not the core one.
Where elections actually matter
None of this means elections are irrelevant. They matter most not to the index, but to specific corners of a portfolio:
- • Policy-sensitive sectors. Defense, energy, healthcare, financials and real estate can all react to expected shifts in budgets, regulation or taxation.
- • Currency. For investors holding assets in both shekels and dollars, political uncertainty often shows up first in the exchange rate. A move in the shekel can matter as much to your real return as a move in the stock itself.
- • Fiscal direction. Coalition agreements in Jerusalem and the balance of power in Washington shape deficits, defense spending and tax policy, which in turn shape interest rates.
- • Deal timing. In private markets, some investors and founders prefer to wait until after a vote to sign. That can create short pauses in deal flow, and sometimes better entry points for those who are prepared.
A practical playbook for election season
- 1. Don't trade the headlines. The data in both countries suggests that the pre-election dip and the post-election recovery tend to cancel out within months. Selling into the noise often means locking in the worst part of the cycle.
- 2. Separate politics from policy. Ask what would actually change for a business or asset you hold, not which candidate you prefer.
- 3. Review your currency exposure. Cross-border investors should know how much of their portfolio is effectively a bet on the shekel-dollar rate.
- 4. Think in 12-month windows, not election nights. Historically, the year after the vote has been where the opportunity shows up.
- 5. Keep some dry powder. Volatility is uncomfortable, but for patient investors it is also where valuations become more attractive.
- 6. Talk it through. Elections are a natural moment to revisit allocation and goals with your advisors, calmly and on your own timeline.
For founders comparing offers, the more useful questions tend to come after the valuation discussion: what the investor has done for other companies, whom they are willing to introduce, and whether they know the market well enough to say when an idea is not working. The amount on the check shows how long a company can keep going. The investor’s experience and relationships help decide whether it is going in the right direction. (copy)
The Genesis view
Our members sit at the intersection of two economies that have repeatedly shown they can absorb political turbulence and keep growing. Israel's innovation engine and America's depth of capital don't switch off on election day. The ballot box will decide who governs. It is far less likely to decide how your portfolio performs over the next five or ten years. That still comes down to the quality of the opportunities you choose, the discipline you bring and the partners you invest alongside. Genesis BH connects high-net-worth investors with curated opportunities across the U.S. and Israel. To learn more about membership, visit www.GenesisBH.net.
This article is for general information only and does not constitute investment, tax or legal advice. Past performance is not a guarantee of future results. Please consult your own professional advisors before making investment decisions.
Member Highlight
Beyond Capital: What Great Investors Really Bring to a Startup
Co-Founder and Managing Partner, Genesis Business Humanity
Editor’s Note: The company examples in this post reflect what each team shared with Genesis members at the time of the session, and both are still developing.
When a startup shuts down, the post-mortem usually says the same thing: it ran out of money. CB Insights analyzed 431 venture-backed companies that shut down since 2023, and among those where the cause could be identified, 70 percent ran out of capital. Its analysts describe that as the final cause rather than the root problem. Forty-three percent had never found enough customers who wanted the product, 29 percent launched at the wrong time, and 19 percent could not make the economics of each sale work, with many companies citing more than one reason. Together, the 431 companies had raised $17.5 billion before they closed.
That pattern changes what an investor is worth to a company. If a shortage of money is usually the symptom, an investor who supplies only money is treating the symptom. What a struggling company more often needs is an investor who has seen the market before and can say whether it is real, who can introduce it to customers and partners, and whose involvement gives other people a reason to take it seriously. CB Insights also found that among the 206 companies with tracked business relationships, partnership activity dropped 44 percent in the final year compared with the year before, which is consistent with a company whose network is thinning out as it struggles.
Academic research points the same way. Researchers at Stanford, MIT, and Dartmouth studied what happened when new airline routes made it easier for venture investors to visit the startups they had backed. Startups whose investors could visit more easily produced more innovation and were more likely to reach a successful exit, such as a public listing or a sale of the company. Because the new routes were unrelated to the quality of the startups, the researchers could separate the effect of involvement from the effect of simply picking strong companies. A separate study in the same journal found that companies backed by better-networked venture firms, meaning firms with stronger relationships with other investors, were significantly more likely to survive to their next round of funding and to reach an exit. Both studies looked at venture capital firms, and both describe what an investor’s time and relationships can do for a young company.
That is the model Genesis is built around. Genesis describes its work as identifying promising companies in Israel and other countries and leading them into new markets, bringing human or financial capital and helping them scale profitably in the United States and beyond. Its members are described as industry leaders and entrepreneurs, which means the experience on offer comes from people who have built and run companies themselves. Two recent examples show how that looks in practice.
Boson Energy turns non-recyclable waste into hydrogen, and the company is evaluating locations in the United States. Genesis introduced the team to an advisor based in New Jersey who can help explore landfill and utility authority sites, and the next steps are identifying specific sites and setting up a U.S. entity. Biomicroscience, a medical device company developing technology for cardiovascular and neurosurgical procedures, is moving into first-in-human trials in Israel and at three U.S. hospitals, and Genesis is working to connect the team with strategic partners in cardiology and neurosurgery. Neither introduction is just a check. Each is a door the company would otherwise have to find on its own.
The same pattern shows up in the room. In a recent session with a pharmaceutical compounding company, members raised questions about how the FDA’s evolving stance on peptide categories could change the size of the company’s market and about the practical side of delivering peptides in auto-injector pens. Those are questions a company is better off hearing early, from people who know the terrain. Members who want to go further can join due diligence sessions hosted by co-founders Amiel Aviman and Ranny Yarom, where a company is examined in more detail.
For founders comparing offers, the more useful questions tend to come after the valuation discussion: what the investor has done for other companies, whom they are willing to introduce, and whether they know the market well enough to say when an idea is not working. The amount on the check shows how long a company can keep going. The investor’s experience and relationships help decide whether it is going in the right direction.
Genesis is an invitation-only investment and social club with chapters in Miami, New York/New Jersey, and Los Angeles. For Israeli startups interested in the U.S. market, contact info@genesisbh.net.