Presidential Campaign May Scrub Shine Off Stocks

Tuesday, 06 Mar 2012 07:44 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  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.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Hedge Funds Cut Gold Bets in Longest Slide of 2014

Sunday, 20 Apr 2014 16:50 PM

Hedge funds lowered bullish bets on gold for a fourth week, the longest streak this year. . . .

Weibo Debut Highlights Complicated Dance With Chinese Censors

Friday, 18 Apr 2014 11:40 AM

Weibo Corp. executives on Thursday toasted the Chinese social media firm's debut at Nasdaq's New York headquarters. . . .

Venture Investments Highest Since 2001

Friday, 18 Apr 2014 11:04 AM

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture cap . . .

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

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