hypothesis of investment advisers that major stock market moves can be predicted based on the four-year presidential election cycle. Stocks should start to rise in anticipation of the economic recovery that the incumbent president wants to be roaring at full steam by election day.
hypothesis of investment advisers that major stock market moves can be predicted based on the four-year presidential election cycle. According to this theory, stocks decline soon after a president is elected, as the chief executive takes the harsh and unpopular steps necessary to bring inflation, government spending, and deficits under control. During the next two years or so, taxes may be raised and the economy may slip into a recession. About midway into the four-year cycle, stocks should start to rise in anticipation of the economic recovery that the incumbent president wants to be roaring at full steam by election day. The cycle then repeats itself with the election of a new president or the reelection of an incumbent.
