We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How Do Presidential Elections Affect The Stock Market?
Read MoreHide Full Article
As the presidential election nears, the candidates are making their final campaign pushes, and the media is churning out election-related headlines at an all-time high. This can be a lonely time for investors; despite a busy third-quarter earnings season, news about the stock market is taking a backseat to the latest email hacks and video leaks.
Election Cycle Trends
While this year’s election cycle has been uniquely contested, the battle between Hillary Clinton and Donald Trump provides what nearly every election provides: uncertainty. This race is close, and the polls have already proven their ability to change in an instant. It’s likely that we won’t be able to call a winner until Election Day.
As investors, we typically associate uncertainty with volatile stock performance. It makes sense—we want to make sure our portfolios are protected, and we are inherently more likely to buy when we feel confident and comfortable.
Nevertheless, presidential election years are not historically poor years for the stock market. In fact, it’s quite the opposite: markets have gone up in 17 out of 21 presidential election years since the Great Depression.
For more information on the behavior of the stock market during election cycles, check out this infographic from Option Alpha:
Bottom Line
As you’ll notice, the election years in which the stock market underperforms are the years in which we elect a new president. Of course, with President Obama on his way out, this year is one of those “new president” years.
With the S&P 500 (SPY - Free Report) up about 4.8% year-to-date, perhaps the 2016 election will prove itself to be even more unique by defying the historical trends of the market.
More About Option Alpha
Option Alpha is an online education platform that specializes in options trading. What started as a small personal blog has quickly grown into one of the industry's most respected authorities on options trading and more than 6.4 million visitors each year and 35,000 active members representing 42 countries.
Stocks that Aren't in the News. Yet.
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of +26% per year. See these high-potential stocks free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
How Do Presidential Elections Affect The Stock Market?
As the presidential election nears, the candidates are making their final campaign pushes, and the media is churning out election-related headlines at an all-time high. This can be a lonely time for investors; despite a busy third-quarter earnings season, news about the stock market is taking a backseat to the latest email hacks and video leaks.
Election Cycle Trends
While this year’s election cycle has been uniquely contested, the battle between Hillary Clinton and Donald Trump provides what nearly every election provides: uncertainty. This race is close, and the polls have already proven their ability to change in an instant. It’s likely that we won’t be able to call a winner until Election Day.
As investors, we typically associate uncertainty with volatile stock performance. It makes sense—we want to make sure our portfolios are protected, and we are inherently more likely to buy when we feel confident and comfortable.
Nevertheless, presidential election years are not historically poor years for the stock market. In fact, it’s quite the opposite: markets have gone up in 17 out of 21 presidential election years since the Great Depression.
For more information on the behavior of the stock market during election cycles, check out this infographic from Option Alpha:
Bottom Line
As you’ll notice, the election years in which the stock market underperforms are the years in which we elect a new president. Of course, with President Obama on his way out, this year is one of those “new president” years.
With the S&P 500 (SPY - Free Report) up about 4.8% year-to-date, perhaps the 2016 election will prove itself to be even more unique by defying the historical trends of the market.
More About Option Alpha
Option Alpha is an online education platform that specializes in options trading. What started as a small personal blog has quickly grown into one of the industry's most respected authorities on options trading and more than 6.4 million visitors each year and 35,000 active members representing 42 countries.
Stocks that Aren't in the News. Yet.
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of +26% per year. See these high-potential stocks free >>