Chart: Stock performance during presidential election cycles

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In election years, stock performance can be among the trickiest to predict. Investors can look to the past, but there are no easy answers.

 

  • Stocks tend to do the best in the year before a presidential election, as in 2019. Historically, there was only one very modest 0.7% loss in year 3 of a cycle, in 2015. The other three cycle years have seen both large gains and losses.
  • Year 2 (75%) and year 4 (64%) have the largest range from biggest gain to biggest loss, suggesting anything is possible in 2020 (year 4). Investors should stick to a consistent investment plan rather than taking election cycle theories too seriously.

 

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