Presidential Campaign May Scrub Shine Off Stocks

Tuesday, 06 Mar 2012 07:44 AM

By Dan Weil

  Comment  |
   Contact  |
  Print  
|  A   A  
  Copy Shortlink
Stocks may be enjoying their best start to a year since 1998, but if history is any guide, the uncertainty of the presidential campaign will soon erase the market’s luster.

In its study of stocks in presidential-election years going back to 1900, Ned Davis Research finds that stocks generally open the year with a bang but hit the skids by spring, The Wall Street Journal reports.

So far this year, the Dow Jones Industrial average has soared 6 percent. But Tony Welch, an analyst at Ned Davis Research, says the Dow may well fall back 5 percent or 6 percent in the next few weeks.

Editor's Note: Meltdown on Main Street Coming, Prepare Now

"We think the election-year trend could be strong this year," Welch tells The Wall Street Journal. "The market prefers certainty. It doesn't like unknowns."

Some other market gurus also expect stocks to correct downward amid Europe’s debt crisis and sluggish economic growth in much of the world.

To be sure, stocks generally recover from their pre-election jitters, Ned Davis found. On average the Dow has appreciated 7.5 percent in presidential years since 1900, compared with 7.35 percent for all years.

Meanwhile, InvestTech Research finds that stocks are a good predictor for the election, according to U.S. News & World Report.

The firm’s research shows that in 25 out of the 28 elections since 1900, if stocks rise in the two months preceding the election, the incumbent party wins. If not, the out-of-power party wins.

Editor's Note: Meltdown on Main Street Coming, Prepare Now

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Fruit of the Boom: 'Underwear Indicator' Hints Recovery Isn't Brief

Wednesday, 26 Nov 2014 13:09 PM

The "underwear indicator" might be signaling strength for the economy. . . .

El-Erian: 'When You Have Very Sharp Moves in Currency, Something Breaks'

Wednesday, 26 Nov 2014 11:53 AM

The dollar's upward surge may cause problems for stocks, says Mohamed El-Erian, chief economic adviser for Allianz. . . .

Falcone Steps Down From Harbinger as Leucadia Raises Stake

Wednesday, 26 Nov 2014 10:29 AM

Philip Falcone is stepping down as chairman and chief executive officer of Harbinger Group Inc., the public holding comp . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved