The Election Cycle Begins

You only have one shopping day left to take advantage of the four-year Election Cycle. Major caveat: I don’t put much faith in any of this, but here’s what the data says.
Going back to 1930, the Dow reaches its average bottom on September 30 of the mid-term election year. From that point until September 13 of the pre-election year, the Dow gains an average of 31.6%.
That means that over 95% of the Dow’s four-year gain comes within the first 12 months of the Election Cycle.
After that, the market then gets a bit dicey until May 25 of the election, losing 6.6%. But then things start heating up. The market puts on an impressive 19.4% rally to August 2 of the post-election year.
Then all the troubles start. After August 2 of the post-ection year, the market slides an average of 9.4% until we’re home again–September 30 of the mid-term.

Posted by on September 28th, 2006 at 3:01 pm

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