Election cycle and stock market

How Do Stocks Perform During the Presidential Election Cycle? | Charles Schwab

I keep a crystal ball on my desk just for these occasions. When asked such a question, I reach over, pick up my crystal bar, and stare.

Presidential Election Cycle (Theory)

Nickles, EdD, expanded upon this data in a paper called Presidential Elections and Stock Market Cycles. His detailed research shows that a profitable strategy would be to invest on October 1st of the second year of a presidential term and sell on December 31st of year four.

After laying out the data to support this strategy, he goes on to say:. Junkans, CFA, and their Senior Investment Manager, James P.

If you're looking for a pattern, why not try the Super Bowl Stock Market Predictor. If the winning team was originally from the old American Football League, the market will decline. Suppose you hired an investment advisor who was familiar with the studies above.

They show you the outstanding returns you would have experienced over the past twenty years if you had entered the stock market during the later years of presidential terms, and exited during the initial years. You may even have had the expectation that in , the market should have twice the return that it had in During the election cycle, if you invested on October 1 of , until December 31st of , your investments would have been down by 6.

The pattern did not work for the election cycle.

It looks like turned out well though! Oct 1, through year-end turned out to deliver a strong positive return.

What's in store for ? Your guess is as good as mine. The problem with investing based on such data patterns: It involves understanding risk and return , diversifying, and buying low-cost index funds to own for the long-term I know it works, no matter who wins the election. Published October 18, , in the Wells Fargo Quick Market Update.

4 Factors Affecting the Stock Market in a Presidential Election Year - TheStreet

Written by Dean A. Junkans, CFA, Chief Investment Officer and James P Estes, PhD, CFP, Senior Investment Manager. Table Below Shows Market Returns for Each Election Year Since Data below is from Dimensional Funds Matrix Book. Search the site GO. Updated December 27, If you want excitement…go to Las Vegas. Get Daily Money Tips to Your Inbox Email Address Sign Up.

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