Historically, presidential elections have heavily impacted the stock markets causing both bullish and bearish reactions. As a direct result of these "reactions", recognizable patterns have formed that can be used for investment-managing purposes. Given the uniqueness of this particular election cycle, it is possible a new pattern will begin to emerge. Whoever prevails will certainly play a large role in where the markets go from here. We’re going to look at what can happen when they take the oval office and examine past election statistics.
Gains and Losses Since 1928
Let’s look at the 22 presidential elections held since 1928. In 14 elections, the stock market showed gains three months prior. 12 of these 14, the incumbent won and therefore remained in the White House.