The numbers during Barack Obama's, Donald Trump's, and Joe Biden's first years were huge. The market gained 26% and 32% during the first year of Obama's two terms, Trump's first year saw a 22% return, and the market gained 29% the year Biden took office. The second year is slightly better than the first on average, with a 4% average return - still nothing to write home about. The third year is normally the best, with a 10.2% average gain, followed by a 6% return in election years. The trend makes sense when you think about it. In the early part of a president's term, they're more likely to make tough economic decisions, because they have a grace period and they're years away from either running their own reelection campaign or campaigning for their party's next nominee. But as they get closer to the end of their term, they're going to start handing out economic favors all over the place to win over voters. That extra money sloshing around lubes up the economy and the market. Of course, every president and every Congress will have different policies that affect the stock market in various ways. But if the market's yearly gains were simply random, you'd think the results would be more similar over such a long period of time. Now, I want to be clear that I'm not calling for a bear market next year. But knowing that the first year of a president's term has historically been the weakest for stocks is a useful piece of information to file away. I place a lot of value on these types of anomalies as I'm analyzing the market. Ignoring them can be the difference between having an edge over everyone else and being frustrated that the market didn't behave like you thought it would. Good investing, Marc P.S. If you thought that was impressive, just wait until you see this... I've just uncovered a pattern in the market that occurs month after month with stunning consistency... And I'm going public with all the details. Click here to watch my training on how to exploit this trend for the chance at thousands in extra monthly income. |
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