The 4-Year Presidential Election Cycle
The Presidential Election Cycle provides an historical basis for investors to be optimistic in 2007.
The stock market has not posted a loss in the year before a Presidential election since before World War II. And going back nearly two centuries, the third year of a president's term has on average been the best one for investors.
The "Stock Trader's Almanac 2007" concludes that wars, recessions, and bear markets are more common in the first half of a president's term. The stock market has on average posted gains during those years, but they were relatively small.
It's been the third year that has been the most prosperous, with the markets gaining nearly 11 percent on average. 2007 marks the third year of President Bush's current term.
The Presidential Election Cycle has proven to be one of the most reliable market predictors. While its patterns are not certain to repeat themselves at every opportunity, knowledge of history can help investors to better understand the financial markets.
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The stock market has not posted a loss in the year before a Presidential election since before World War II. And going back nearly two centuries, the third year of a president's term has on average been the best one for investors.
The "Stock Trader's Almanac 2007" concludes that wars, recessions, and bear markets are more common in the first half of a president's term. The stock market has on average posted gains during those years, but they were relatively small.
It's been the third year that has been the most prosperous, with the markets gaining nearly 11 percent on average. 2007 marks the third year of President Bush's current term.
The Presidential Election Cycle has proven to be one of the most reliable market predictors. While its patterns are not certain to repeat themselves at every opportunity, knowledge of history can help investors to better understand the financial markets.
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posted by Bob Moser at
1:28 PM
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