Posted on 09/14/2010 1:33:54 PM PDT by SeekAndFind
FORTUNE -- While most secular market indicators -- hemlines, sports, the weather -- matter little to big investors, the correlation between midterm elections and rising stock prices is practically gospel. "The charts are eye popping," says Deutsche Bank chief U.S. equities strategist Binky Chadha, who points out that the S&P 500 has produced gains in 18 out of the last 19 midterm election cycles. "It really is an anomaly," he says.
The S&P has returned an average of 13% in the six months after midterm elections, Chadha says, and 17% over the next twelve months, which is vastly better than how it has performed in non-election cycles. The indicator works regardless of which party wins control of Congress, but it's especially strong where there is a Democratic president and Republican legislature. When that scenario is in place, stocks average 14.6% annual returns, according to Bill Stone, chief investment strategist at PNC Wealth Management. "It's the best of all iterations," he says.
With that in mind, many investors are gleefully awaiting this year's midterm elections. The latest Cook Political Report projects that Republicans will gain control of the House and come close to winning back the Senate, pushing Congress into a state of political gridlock (according to Chadha, 70% of midterm elections result in the president losing seats in both chambers).
And gridlock, market experts say, is why midterm elections are good for stocks. The less power a president has, the less likely he is to push an activist agenda, unshackling businesses from the burden of regulatory uncertainty. Or so the theory goes.
(Excerpt) Read more at money.cnn.com ...
Sure, it would at least give some certainty for business, even if only for 2 years. Right now, they have none.
The market would climb 1000 points if 0bamao were to resign or be removed!
The RATS may be tempted to ‘’arrange’’ for 0’bs departure in hopes of recovering by 2012. Wouldn’t put it past them.
I think some of the rallys we have been seeing recently are, in fact, some investors pricing in the likely Republican wins this November.
The likely prospect of a Republican takeover of Congress in the fall is ALREADY boosting stocks.
I have been quietly accumulating in a few of my favorites and expect an election pop going into November. We may selloff in December (tax loss selling, etc.) depending on which way the tax cut argument goes (cap gains). 2011 is not yet clear. A good stock may get taken down some with the market but if it is a good one, it will shine. I stopped using mutual funds many moons ago, only individual stocks. I am studying options but have a loooong ways to go before I ever attempt them.
Bear...meet...woods.
Would = Has.
Sure, it would at least give some certainty for business, even if only for 2 years. Right now, they have none.
*************
I have been trying to get two things moving for a while now, and cannot get either done because of general paralysis on the part of both buyers and lenders.
Very frustrating, but I can’t really blame them.
The RATS may be tempted to ‘’arrange’’ for 0’bs departure in hopes of recovering by 2012. Wouldn’t put it past them.
*************
Agreed. He is merely an international construct and a figurehead. When he is more liability than asset his controllers may decide upon a dramatic change in status.
Which has more value? A promising martyr or a failed prophet?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.