Those who ignore the lessons of history are condemned to . . . reading graphs, or something like that.
Looking at 2016, it is hard to ignore the upcoming Presidential election in November. Have these elections affected the stock market in the past? First, you have to remember the hobgoblin of Wall Street minds is uncertainty - they simply hate it! Now, take a look at this graph:
Looking at 2016, it is hard to ignore the upcoming Presidential election in November. Have these elections affected the stock market in the past? First, you have to remember the hobgoblin of Wall Street minds is uncertainty - they simply hate it! Now, take a look at this graph:
If history is indeed our guide, we can expect the ugly recent churning in the stock market to continue until June, as election uncertainty increases. But, as that uncertainty begins to fade, we usually see a strong rally into the next New Year. Looking at all Presidential elections since 1900, the stock market has gained about 11% during election years, almost entirely in the second half of the year.
Normally, investors are in a hurry to get their money invested into the market. But, every four years, you can take your time. Cash is also an asset -- sometimes the best performing asset, even if only for relatively brief periods.
