Election Year Cycle & Stock Market Returns - VisualisedIn this chart, we're analysing the open value of the week the US election took place and comparing it to the open of the following election, showing the gain (or loss) in value between each election cycle.
Historically we can see prices in the Dow Jones Industrials Index tend to appreciate the week the election is held. Only twice has the return between the cycles produced a negative return.
Buying stocks on election day, 8 out of 10 times has yielded a profitable return between the election cycles. 80% of the time in the past 40 years returning a profit, has so far been a good strategy to take.
The typical cycle starts with the election results, an immediate positive movement and continued growth before finishing positive.
The Outliers
2000-2004 was the only year which ended negative without prices going higher than the election day.
2004-2008 increased 41.84% before ending negative.
2008-2012 began the cycle falling 30.62% before finishing positive.
The names of presidents who won their respective elections is to visualise who had the presidential term during that specific cycle.
