"Presidential election years are usually better than average for the economy."
Statistically speaking that's true enough.
As part of Norman Fosback's market cycle research, he discovered that the average BEST market year out of the four year Presidential term was the THIRD year --- this year.
And the SECOND BEST on average was the FOURTH year --- next year.
(With, if memory serves, the WORST year out of the four usually being the FIRST year of a President's term....)
So, best market performance out of the four year cycle is expected to be: 3rd. year, 4th. year, 2nd. year, 1st. year.
(Theory to explain these observed results is that President's try to get the necessary 'hard or dirty work' such as raising taxes, etc., out of the way right away --- to give the voters the maximum amount of time to forget before the next election, or to give their new policies the maximum amount of time to work and show results. Politicians want everything to be all spruced-up and shiny and running well in time for the elections.)
Of course, I believe the statistical significance of this four year cycle was somewhat LESS in a President's SECOND TERM....
Still, there are other factors then just the "Presidential Cycle"!
Wars, deficits, commodity or inflation cycles all may have much larger impacts upon market returns:
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