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Insights Into S&P 500 Performance During Presidential Elections

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Insights Into S&P 500 Performance During Presidential Elections

The S&P 500 rose 28.9% in 2019, outperforming the 10-year average of 11.8%. That performance puts 2019 in unique company—it was the 11th best performance in S&P 500 history dating back to 1928 and the second best in the past 20 years.

Annual % Change S&P 500

Yearly Performance Top 11

But what does that outperformance mean for the markets in 2020? History has shown us that in the years following the 10-best S&P 500 years, the index more often than not posts a positie gain. A negative return has only happened three times: 1928, 1933, and 1945. 

2020 Prediction

This year is also unique because of the role played by the presidential elections. This leads to the question of how the S&P 500 typically performs during presidential elections. 

Since 1928, the S&P 500 has shown a negative performance only six times in Presidential election years. More typically, it has closed with strong gains.

Annual % Change Per Year During Elections

In the past 50 years, the S&P 500 has dropped two times during the presidential elections: the dot-com bubble burst in 2000 and the financial crisis in 2008.

Both were unforeseeable events in terms of timing. Based on historical patterns, the S&P 500 should look forward to another year with a strong closing.

Alexander Voigt is the CEO and founder of daytradingz.com

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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