Quote:
Originally Posted by jimjamuser
One easy way to time the market in a 2 or 4th year election year that works about 80% of the time is to sell stocks in April and use the cash to buy back in about October - because there is a tendency for the market to go up after a national election (no matter who wins). The idea is that the market likes stability and AFTER an election, there are fewer unknowns. Then hold on to those stocks because Dec with Xmas and later January tend to be UP months. .
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Please provide supporting data since you are presenting this as fact.
Here are some facts:
In 2016, Charles Schwab analyzed market data going back to 1950 and found that, in general, the third year of the presidency overlapped with the strongest market gains. The S&P 500, a fairly broad index of stocks, exhibited the following average returns in each year of the presidential cycle:
Year after the election: +6.5%
Second-year: +7.0%
Third-year: +16.4%
Fourth-year: +6.6%
Overall, the predictive power of the presidential election cycle theory has been mixed. While average market returns in years one and two have been slightly sluggish overall, the direction of stock prices hasn’t been consistent from one cycle to the next. The bullish trend in year three has proven more reliable, with average gains far exceeding those of other years. What’s more, roughly 90% of all cycles since 1950 experienced a market gain in the year after the midterm elections.