New presidents give stocks a boost

published 8 May 2009

Bear markets declines of at least 20% tend to bottom in the first or second year of a presidential term, says Sy Harding in Barron's. That's because new administrations typically "do whatever it takes" to strengthen the economy by the time they're up for re-election.

Since 1917 there have been 19 bear markets and 15 fit this pattern. Three of the four exceptions came during a president's second term, when there was no pressure to be re-elected.

Only when Hoover was president, during the Depression, did the bear take until the fourth year of the term to finish. Hoover wasn't re-elected.