📈 Election Year Performance

This is what typically happens.

Election Year

As we all know, we have an election coming up in about a month. Goldman Sachs put together some research on typical stock market performance in election years that I think is useful for everyone to be aware of.

Let’s review.

The one word that best describes elections from the perspective of the stock market is uncertainty. And markets hate uncertainty.

You can see that in the month leading up to a Presidential election we often see a pullback followed by a recovery just prior to the election.

This may be because we have an increasing amount of uncertainty leading up to the election, which then resolves itself in the days leading up to the election as it becomes more clear what the outcome will likely be.

How to Trade

Recognize right now that regardless of what side you are on, this is projected to be one of the closest elections in a long time.

The markets do not know who is going to win. This causes uncertainty.

I wouldn’t be surprised if we saw something similar to the chart above, basing until the election.

The other thing to note is that historically we lift for the rest of the year following an election. There’s no reason to expect anything different this time around.

For more details on the research and my way of trading it, click here: