Mid-Term Elections

Mid-Term Elections

by Timothy J. Ralph, Portfolio Manager

With the November mid-term election right around the corner, I thought it would be fitting to discuss stock market (S&P 500) statistics during Presidential Cycle Year Midterms election.
Chart 1: Mid-term year three-month seasonality tends to flip to positive from negative in August-October — this suggests becoming more bullish on the S&P 500 in August and buying a September dip ahead of 4Q, which is the best 3-month period of the Mid-term year.

But here’s the kicker: The S&P 500 has been up 86% of the time with an average return of 6.37% during the fourth quarter of a mid-term election year, according to BofA data.
We even looked back at the last few Presidential elections during the 200’s, where the following 12 month return after the election reflected positive returns.

Source: Zachs Investment Research
With statistics on our side, we view this as one of the more favorable points in historically to be allocated into S&P 500 assets. While many have been rattled by the recent negative global market price action, we have stayed the course – diversified and value driven. For more information on our investment approach visit: https://biltmorecap.com/investing/

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