Chart of the Day: Weak Post-Election Year Stock Performance

By Chart of the Day

Today’s chart illustrates how the stock market has performed during the average post-election year. Since 1900, the stock market has tended to underperform from early January to late February and again from early August to early November during the average post-election year.
Some parts of the year have, on average, outperformed. The most notable period of outperformance has occurred from late March to late May. In the end, however, the stock market has tended to underperform during the entirety of the post-election year.

One theory to support this behavior is that the party in power will tend to make the more difficult economic decisions in the early years of a presidential cycle and then do everything within its power to stimulate the economy during the latter years in order to increase the odds of re-election.

 

Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.
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Chart of the Day provides insightful charts with regards to the US stock market, US economy, gold and associated indicators. At any given moment our focus is determined by market conditions and feedback from our subscribers. Some of our subscribers consider Chart of the Day as their own independent investment research department.

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Comments

  1. “One theory to support this behavior is that the party in power will tend to make the more difficult economic decisions in the early years of a presidential cycle and then do everything within its power to stimulate the economy during the latter years in order to increase the odds of re-election.”

    That’s so logical it can’t possibly be correct :)

  2. Yes, this is a no-brainer. But it’s good to see the data confirming what common sense would indicate…