Truth about election years and the stock market

Makes no difference which party is in the White House at election time Next year is a Presidential election year, and the stock market is almost always positive in election years. Right? At least that assurance has been a supposed truism for many decades, and repeated as fact each year in numerous interviews and financial columns. And it makes sense. After all, the Four-Year Presidential Cycle has an unusually consistent pattern of the market experiencing most of its serious corrections in the first two years of a Presidential term and most often making a substantial recovery in the last two years. The pattern was interrupted when the financial crisis hit and 2007 and 2008, the last two years of the Bush Administration, experienced a serious bear market. But the circumstances were unusual, and the few times over the last hundred years that the cycle did not hold true to form did not affect the long-term percentage of the cycle.

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