A common question that I have been asked recently is what I think will happen to the US equity markets after the presidential election results are out. I happen to have a “crystal ball,” i.e. the Stock Trader’s Almanac to assist me. Before I dive into this topic, I want to remind you that regardless of history, there are no guarantees that we will follow the same patterns. Traders still need to rely on their analysis of the trend and supply and demand to make their own trading decisions.
The almanac states that since 1833, the pre-election and election years have been the best performers. Percentage wise, they outperformed the other two years by more than two to one. They continue to state that the first two years of a new term are where wars, recessions, and bear markets usually begin. The last two typically see recovery and bullish times.
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