As you can see below, the years prior to a presidential election, and the election year itself, tend to be good for stocks as candidates make promises for a new tomorrow.
Then, after the honeymoon is over, reality sets in and the bills come due.
But twice this century, in 2000 and 2008, stock market performance during election years was not good at all, as hanging chads and “hope and change” polarized investors. And the years before the elections were not much to write home about either.
America is currently in the year before a presidential election and, so far, markets are on a tear. But have Americans ever been as divided?
Remember, successful Americans vote with their wallets—in the voting booth and the stock market.
If they feel government is coming for them, you can forget using the presidential cycle as a crystal ball.
