When exploring the complex picture of the interweaving of American politics and economy, one phenomenon that cannot be ignored is that there seems to be some subtle connection between the US election year and the stock market performance. By deeply analyzing the performance of the S&P 500 index during the nearly 13 US elections since 1972, we found several interesting and thought-provoking patterns.
1. Average prosperity in an election year
First, overall, during these 13 election years (especially from September to December), the S&P 500 index showed a moderate growth trend, with an average increase of 0.43%. This data tells us that despite the turbulent political arena, the stock market always seems to find its stable growth rhythm. More interestingly, when we exclude the years of economic recession (1980, 2008, 2020), the average increase increases to 0.9%, indicating that the stock market performs stronger in election years when the economy is stable.
2. The “year-end sprint” phenomenon
Further analysis shows that November and December of election years have become the "golden time" for the stock market. In these two months, the average increase of the S&P 500 reached 1.44%, and if recession years are excluded, it rose to 1.18%. This shows that as the election date approaches, the market tends to see a wave of optimistic sentiment-driven gains, and investors are full of expectations for future policy trends and economic prospects.
3. November is the “miracle month”
It is particularly noteworthy that in November alone, the average increase was as high as 1.61%. Even after excluding the recession years, it maintained a steady growth of 0.9%. This phenomenon may be related to the high sentiment of voters, the clarification of policy expectations and the reallocation of market funds. In the absence of an economic recession, November seems to have become one of the most outstanding months for the stock market.
4. The double-edged sword of economic recession
However, when the shadow of recession looms, the situation is completely different. The experience of 1980 and 2020 tells us that if there is a recession before the election, the S&P 500 often rises by more than 10% in November. This seems to be a "reversal" of the stock market, but in fact it reflects the market's strong expectations for policy stimulus and panic rebound. But this kind of growth is often accompanied by high uncertainty and risk.
5. “Relative advantage” in an election year
Ultimately, our research reveals an important conclusion: The probability of a stock market rally increases significantly before the U.S. election if the economy remains stable. More importantly, in September and October of the election year, when there was no economic recession, the average increase of the S&P 500 reached 0.54%, with September leading the way with an increase of 0.95%. This shows that election years tend to be a relatively friendly period for the stock market, with performance even slightly better than non-election years.
Conclusion
In summary, the relationship between the US election year and the stock market is complex and subtle. Although political fluctuations may bring uncertainty, historical data shows that in an economically stable environment, election years often provide momentum for the stock market to rise. Therefore, for investors, grasping this law and rationally analyzing market trends may help them capture their own investment opportunities in the symphony of politics and economy.
The next three months will be a roller coaster for the cryptocurrency market. Overall, the new president taking office in January will definitely have the opportunity to bring a new track to the forefront. There will always be opportunities, the key is to keep enough u.
