We Like August In Election Years
- Posted by JC Parets
- on July 31st, 2012
It’s hard for us not to be optimistic going into the month of August. Forget about all of the trendline breaks and multi-decade lows in bullish sentiment for just a minute and let’s just look at seasonality. Specifically, focus on the typical late-summer buoyancy in stocks during election years.
According to the my trusty Stock Trader’s Almanac, the Nasdaq has returned an average of 2.7% and the Russell2000 3.5% during the month of August during Election Years. The Dow Jones Industrial Average and S&P500 have also averaged positive returns since 1950 but lag the others returning just 0.8% and 0.9% respectively.
For you guys keeping score at home, this year’s stock market has followed its historical pattern very nicely. This is a chart from Bespoke Investment Group showing the historical pattern for the S&P500 on election years going back to 1928 (in red, this year in blue). Look at August:
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J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...
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