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Weekly Supplement - Aug 21, 2011 Stock Market
Report
Presidential Pre-election Year Stock Market Performance
The
Last Two Presidential Pre-Election Year Bears, 1939 and 1931
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The below chart displays the most
profitable year for stock market investing when using annual political
cycles. The presidential pre-election year is the most profitable along
the four-year cycle. Since 1832, a $10,000 investment in the stock market
with an underlying asset base similar to the Dow30 stocks only during
presidential pre-election years grew to $302,066 by 2007, which was the
last pre-election year. This investment only occurred in the pre-election
year, while avoiding the stock market the other three years in the
four-year cycle. Please note the logarithmic scale.
Scroll down to see the details of
both of those "unusual" bear markets. |
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The last bearish pre-election year
was in 1939 with a mild 2.9% bearish conclusion to it. As you can see, the
MTI signaled bear after it fell below MTI Bearish Yellow. Shortly
thereafter, it garnished mild bullish energy with some nervous behavior to
round out 1939 with mild overall bearishness. FDR-economics, like any
politically-laced philosophy, was not what one would call robust. |
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1931's presidential pre-election
year was decidedly bearish. President Hubert Hoover was jawboning
potential federal income tax increases in that year. As you can see,
the 1931 pre-election year bear was already configured as a Yellow Bear
ahead of the MTI Bear signal in 1931. That is, the stock market was
already below the Mid-term Indicant's Bearish Yellow Curve. |
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