Profit Not Politics
We are in the midst of another US Presidential election cycle and again clients are worried about the effect the election will have on the stock market. While nothing can be predicted with certainty, we can look at history to get a feel for what might happen.
Since 1944 all presidential elections coincided with a gain in the stock market, except two years that appear to be outliers. In 2000 as the tech bubble burst and in 2008 as the housing bubble burst and the credit markets froze stocks ended the election year lower. But barring any black swan event later in this year, I would expect a return to historical norms and a positive end to 2016 for equities.
In the end it is profits not politics that rule the stock market.
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