You know that bulls are running out of ammunition when the Presidential cycle is used as a catalyst for any future advance. Charts predict the best year to own stocks
From 1833 to 2012, the stock market has on average rallied 1.9 percent in the first year of a president’s term, 4.2 percent in year two and 5.8 percent in the fourth year. Year three is the biggest, and has a return of 10.4 percent market gain in the Dow Jones Industrial average (Dow Jones Global Indexes: .DJI). The only year this didn’t occur was in 1931, the height of the Great Depression. “It’s not just that the market tends to rise during the year before a presidential election. It’s the consistency of this pattern that is so impressive,” said the “Mad Money” host.
I guess it’s time to remind you, once again, that this type of analysis should have no place in financial market. Especially if you are interested in making money. Presidential cycles, years ending in 5, etc…..it’s a fools game. The stock market is a much more complex entity and the second you think you have got it it figured out, it changes. By design. In other words, this sort of simple analysis works only until it backfires, big time.
