New presidents give stocks a boost
Bear markets tend to bottom early in a new president's term because new administrations typically do 'whatever it takes' to strengthen the economy.
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.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
How to add cryptocurrency to your portfolioA new listing shows how bitcoin might add value to a portfolio if cryptocurrency keeps gaining acceptance, says Cris Sholto Heaton
-
ISA reforms will destroy the last relic of the Thatcher eraOpinion With the ISA under attack, the Labour government has now started to destroy the last relic of the Thatcher era, returning the economy to the dysfunctional 1970s
