Over this past election season, the press has been riddled with headlines proclaiming “6 Stocks to Buy If Donald Trump Is Elected“, “Trump-friendly stocks fall as candidate comes unshackled“, “Best Stocks for a Hillary Clinton Presidency“. When it comes to the stock market, candidates have an ostensible sway over how the chips will fall. But the nuances of particular candidates set aside, it’s an observable pattern that election cycles have an effect on the stock market.
General Trends
Looking toward the Stock Trader’s Almanac, Kiplinger reports that the first two years of a new president’s term are often marked by bearish markets and recession, whereas the last two years of a presidents term are marked by bullish markets and general prosperity. Along those same lines, it seems that the Down Jones Industrial has a history of increasing around 10% points in the year before a presidential election and 6% the year of an election.
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