Election Year Historical Data

September 13, 2016 10:08AM CDT

The Stock Trader’s Almanac have scrutinized the performance of the Dow Jones Industrial Average over 177 years of presidential cycles. Beginning with Andrew Jackson in 1829, election years have averaged a 5.8 percent gain in stocks. In fact, 29 out of those 44 election years have resulted in gains for the Dow.

 

The Dow’s long history going back to 1833 paints a clear historical trend: “Wars, recessions, and bear markets tend to start or occur in the first half of the term; prosperous times and bull markets, in the latter half,” The Stock Trader’s Almanac says.

 

Looking at the performance of the S&P 500 Index since Dwight Eisenhower took over the Oval Office in 1953. We discovered that the S&P 500 has historically remained flat over the first two years of a presidential cycle as new administrations take shape and/or second-term leaders reshuffle their team and set priorities. Over the next two years, the market turned markedly higher.

 

Seasonally, research for the past 15 years has indicated this was the week to sell the S&P and buy the 30 Year Bonds and exit and reverse on or about September 23rd and hold longs until after the election.  Then lie low and stay flat until we see if the historical patterns mentioned above will repeat themselves.

 

Just something to think about.

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