A Sitting Democratic Presidential Win – Bad Market Omen?

A lot of investors put enormous emphasis on seasonal trends and the Presidential cycle.  I can’t say that I do, but it’s always an interesting study in historical market trends.  According to Jeffrey Hirsch and the Stock Traders Almanac next year doesn’t bode well:

“We’ve got a sitting president that has won re-election, normally the post-election year is not great, you see a sell-off,” says Hirsch. “Sitting presidents winning has not been the greatest performance, it’s usually flat to down.”

Check out Hirsch’s chart below showing the Dow Jones Industrial Average’s performance in the year following an election.


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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • ES71

    No, it is just a bad omen when you are about to start paying 50% tax on dividens )).

  • Cowpoke

    And every one’s going to be “paying a lil bit more” for health care so not sure how this will distort spending from other sectors.

  • Greg

    Except that paying a little more for health care each year is something we have gotten used to. I cant remember a time since Ive been working that my health care costs didnt rise each year. Can you?

  • Andrew P

    There is an unusually amount of bad stuff percolating beneath the surface or that was kicked past election day this cycle. That doesn’t mean the US market will go down of course, but opportunities are likely to arise somewhere.

  • AWF

    If your worried about the future:

    You never lose money taking a profit — now would be a good time

  • Mikael Olsson

    If the US goes single payer, you’ll see a nice big drop!

  • http://None Midas II

    I say, (going single payer) fat chance in America.

  • Johnny Evers

    Single payer wouldn’t keep costs from rising. Costs would shift even more to the public tab, and in America, maybe not Europe, that means giving a blank check to the health care industry.

  • Mikael Olsson

    I don’t think you fully understand how inefficient (money wise) the US system is. And a LOT of that inefficiency is created in the layer between the insurance companies and hospitals.

    The USA spends almost 18% of its GDP on health care.
    European countries spend between 9% and 11%. And the 11% ones are mostly the ones whose GDP cratered lately.

  • Mikael Olsson


    Health care costs as % of GDP, sorted descending.

    If it wasn’t for the marshall islands, it would be very lonely at the top.

  • Johnny Evers

    I realize it’s inefficient.
    Most of the costs, however, are not insurance costs, but the cost of unnecessary procedures, end of life costs, lack of market restraints on costs, increased costs attributed to our poor health habits.

  • Mikael Olsson

    Bingo. Lack of market restraint on costs, and no incentive to say no to unnecessary procedures. Contrasted to the govt saying “you get this salary, now go to work saving lives”.

    Poor health habits are rampant in the rest of the modern world, too. Maybe a little less but certainly in the same ballpark.

  • Johnny Evers

    There would have to be a dramatic paradim shift for that to work here.
    Uncle Sam would have to say:
    1. You’re a smoker, you’re diabetic, you’re 70 … you want dialysis? Here, take a number and we’ll get to you in 10 years.
    2. You’re unemployed, a high school dropout, probably a drug addict, obese … you know, why don’t you improve your diet and run a few laps. The doctor is busy.
    3. You went to med school for 8 years, interned for 8 years — here’s 75k a year to work in the slums. Be happy.

  • Eagle-Eye

    If the chart had been complied with the data of hundreds or better yet, thousands, of post election market moves, it might mean something. As it is, the limited data sample produces a chart that cannot possibly be a representation of what to expect in the coming year.