Stock Market During Election Years

Here are four investing mistakes to avoid during election season.

Stock market during election years. All election years 11 25 average return do markets rise during an election year. To the stock trader s almanac which is widely used among investors to track historical stock market. Historical returns of stocks and bonds during election years blackrock as of market close on august 17 th 2020 the s p 500 was up 4 68 year to date total return and bloomberg barclays us.

Cashing out of the stock market presidential races make wall street nervous so investors often. It is a normal trend for the stock market to rise during an election year. The s p 500 has made gains in 78 of election years since world war ii.

In each of obama s terms the first two years were more profitable than the third and for trump the first year was more profitable than the second before a major surge in his third year followed by the volatile coronavirus plagued markets of 2020. The blue chip average has fallen 1 6 during election years when there s an open field. I recently updated this study and took the history all the way back to the very first election in 1789 yes there is stock market history that far back if you splice different series together.

And none of those years saw stock market performance that exceeded the s p 500 average annual return. During the presidencies of barack obama and donald trump these stock market theories did not hold up. Despite recent volatility the stock market has risen strongly during trump s term with the s p 500 up over 50 since the november 2016 election more than in the four years following democrat.

A stock market crash cleaved the value of the s p 500 nearly in half between january 1973 and october 1974 accompanied by double digit inflation and a 16 month recession that began in the fall of. Election years as well as during the terms of specific presidents. The aggregate data is clear here s how the s p 500 does in different years of the presidency.