Election Year And The Stock Market

The year before an election year is historically the strongest at 13 3 returns then things slow down considerably to 5 4.

Election year and the stock market. If you are worried about the uncertainty elections present and the fact that 2020 may be a presidential election year when we can t declare a winner on election night resist the temptation to sell. During a presidential term markets do best in the third and fourth years election year and the year preceding it. According to dan clifton of strategas research partners history.

The four year presidential market cycle is well known on wall street. As the answers to those questions unfold investors can at least look to history for some clues about the stock market. History suggests that us stock market returns are correlated with the presidential election cycle.

The first 2 years of a presidential term have been associated with below average returns while the last 2 years have been well above average. 31 of year four. Although the stock market is not the economy historically both have played major roles in the outcome of presidential elections.

So always focus first on the economy and corporate earnings. The stock market and elections a review of market data for the s p 500 going back to the 1930s revealed that certain patterns emerged over those 90 years. But there are some clear exceptions.

Also once the election is over investors can focus on other things like earnings economic growth or interest rates so whatever sentiment driven market action that occurs in the election year. The four year presidential market cycle is well known on wall street. 1 of the second year of a presidential term and sell on dec.

The analysts saw that on average both stock equity and bond markets showed more muted performance in the year leading up to a presidential election than they did at other times.