Presidential elections and stocks [stocksmarketarticles]

Presidential elections and stocks [stocksmarketarticles]

Question by : What can you conclude politically from the history of the stock market for the last 2 years? The market was very high during the last part of the Bush presidency. As polls revealed Obama the likely winner over McCain the market began to drop starting about 3 months before his election. After the elections, the market dropped significantly. The markets then rose slightly when the stimulus was done-almost as high as Sept 2008. Since then the markets have been dropping and are now at the same level they were 8 months ago. It is well known that the markets move not due to events of past but rather to an outlook on the future. Smart money drives up stocks because it anticipates good times ahead and wants to be in on them, not because it is mad at a former president. The minor recession that you are referring to that occurred shortly after the Democrats took control of Congress during the Bush administration turned into a full fledged plunge when it became clear we were electing a Democrat; only a fool would see the actual election day as a trigger. Berkeley is a useless university-especially where economics are concerned. That Democrats historically make the markets go up is pure rubbish. Best answer for What can you conclude politically from the history of the stock market for the last 2 years?:

Answer by Majestic llama
Since dems were in power for the last 4 years, we can conclude that they are bad for the economy...

Answer by Sadcat
"The market was very high during the last part of the Bush presidency. " That's where you lost me. The markets began to drop in 2007, and the big drop came when Lehman Brothers announced it was going into bankruptcy. Historically, the markets tend to go up more during Democratic Presidencies than Republican Presidencies.

Answer by Miguel O.
You can conclude that the market does not like to be told how to run their busyness, and that's precisely what Obama and his croonies are trying to do

Answer by FLSwampBoy
I think you need to review 2008 DOW and S&P 500 numbers. You're re-writing history. It's also somewhat a moot point since it was based on years of minimal regulation/oversight that allowed credit derivatives to be created and dumped into other institutions, that then began to fault on those instruments. Do you work for Goldman Sachs?

Answer by John D "Your ad here"
What do you conclude from these facts? The Dow gained 8,230 points under Clinton, and 602 under Bush. It was in the mid-11,000's when Bush took office, and in the mid-7,000's 2 years later. It was just over 14,000 in late 2007, then sank to just over 8,000 by the time Bush left office.

Answer by justagrandma
Sorry the recession began in Oct 2007, and the reason it hit its lows had less to do with presidents or elections that with the collapse of Lehman Brothers. Followed by revelations of significant problems with major corporations that had been 'fudging the books'. There has been a tendency to use stocks as poker chips, that is as if they had an intrinsic worth higher than actual value. This is still present in the market. There isn't enough value, that is the price to earnings isn't high enough to warrant what we have now, so its almost inevitable that one day, no matter what, or who is in office the market will reflect the much lower value that it actually has.

Answer by Brainchild O
smart money can also be highly corrupt

Answer by MarcThyme
Under Mr. Bush, the Dow Jones Industrial Index went from 10,860 in 2001 when he was elected to 8,279 in Jan 2009 when his Presidency ended, an impressive decline of 23.7%. Under Obama, it has gone from 8,279 to 10,198 as of Friday, a gain of 1,919 points, or 23.18% The FACT is that the last Republican presidency to be good for ANYBODY, rich or poor, was the Reagan Administration.....the GOP have "lost their way"...and Bo Peep is nowhere to be seen... This should come as no surprise, historically the market always does better with a Democrat in the White House; http://money.cnn.com/2004/01/21/markets/election_demsvreps/ http://www.frbsf.org/econrsrch/wklyltr/wklyltr98/el98-19.html http://currencythoughts.com/2008/08/19/how-the-us-economy-performed-under-democrat-and-republican-presidents/ http://hnn.us/articles/8301.html http://www.liveleak.com/view?i=498_1216851590

[history stock market election years]

The Presidential Cycle is nonsense! Or is it? The theory behind the Presidential Cycle is that stocks tend to do well in years 3 & 4 of a president's term, but poorly in years 1 & 2. Why? That's one of thing you'll learn in this video. But more importantly, you'll learn whether or not the whole thing is true -- or just a bunch of "nonsense." What's more, we did some original research here at Wealthpire. Instead of looking solely at all years 3 & 4 and 1 & 2, we look specifically at years 3 and 4 of presidential terms where the president is seeking reelection. After all, the idea behind the cycle is that a president seeking office pulls out all the stops to juice the economy, but an outgoing president would have no reason to. In this episode, you will learn: - The Federal Reserve's role in the Presidential Cycle -- as well as the business cycle! - What are some common criticisms of the Presidential Cycle theory -- and just how valid they really are. - How the Bush administration compared in years 3 & 4 of term 1, versus years 1 & 2 of term 2. - What this could all mean for stocks and other investments in 2012 and beyond. We also did some extensive research in looking at how stocks fared during the last two years of the Bush Sr. administration, versus the first two years of the Clinton administration. Then years 3 & 4 of Clinton's first term, versus years 1 & 2 of his second term -- the results were shocking! Is the Presidential Cycle "nonsense"? Watch this video and then ...

stocksmarketarticles.blogspot.com How the Stock Market Will React to the Presidential Elections

Is an election year good for stocks? Well, let's look at some data. Keep in mind, it's only data â€" and as the old saying goes, past performance is no indication of future results. But the statistics concerning the Dow Jones Industrial Average sure are interesting. It is time to compare and contrast.

The Dow through Election Day. America has now seen 28 presidential elections since the first publication of the DJIA on May 26, 1896. In 20 of those 28 election years, the Dow posted a Y-T-D gain through Election Day. Would that it was true this year. When the market opened on November 4, 2008, the Dow was down 29.71% from its close on the final day of 2007.

The Dow in "election season". Between Labor Day and Election Day, the Dow rose an average of 1.92% in the 27 election years between 1896 and 2004.

When the incumbent President was a Republican, the Dow's average gain between Labor Day and Election Day in those election years was approximately +0.6%. This year certainly did not live up to statistical expectation: the Dow closed at 11,543.96 on August 29 (the last market day before Labor Day) and opened at 9,323.89 on the morning of November 4 for a loss of 19.23% over that period.

The Dow immediately after a Presidential election. The short-term statistic is positive: on average, the DJIA has gained 1.90% between Election Day and New Year's Day in the 27 election years past. Here are two statistics seemingly at odds with each other: when a Republican President is in office during an election year, the DJIA gain has averaged approximately 4.6% between Election Day and New Year's Day.

But when a Democrat is elected (regardless of what party holds the White House), the Dow has averaged roughly a -0.9% loss between the first Tuesday in November and New Year's Day.

On Election Day 2008, the Dow gained 305.45 or 3.28%. However, a day later, all the gain had been lost in the wake of troubling indicators.

The Dow after a new President takes office. The DJIA has gained an average of 4.85% during the first year of a presidency. But when a Democrat is elected, that average gain has been approximately 6.0%. Historically, when a Democrat replaces a Republican in the White House, the average gain has been approximately +13.7% - but that statistic is skewed, because the Dow gained 64% in the year after Roosevelt replaced Hoover. Put 1933 aside, and the average such gain is approximately 1.2%.

 

As for the S&P 500 … TheStreet.com columnist Scott Rothbort tracked S&P 500 data going back to 1950 and found that the price-only return of that index in a post-presidential election year has averaged +3.06%. On the other hand, a research report released November 5 by the Zero Alpha Group (an international network of financial advisory firms) indicates that the S&P 500 has gained approximately 15.8% during Democratic administrations (as compared to about 11.2% during Republican administrations).

 

And what about your financial strategy? While the above data is fascinating to consider, the fact is that we can't foretell the effect a new administration will have on our money. Long-term discipline is the most important factor in an investment strategy, and your financial advisor can help you to practice it.

 

Suggest Presidential elections and stocks Issues