{"id":1013,"date":"2015-11-23T09:43:56","date_gmt":"2015-11-23T15:43:56","guid":{"rendered":"http:\/\/gpswp.com\/apwealthmanagement\/?p=1013"},"modified":"2015-11-23T09:44:57","modified_gmt":"2015-11-23T15:44:57","slug":"how-will-our-presidential-election-affect-the-stock-market","status":"publish","type":"post","link":"https:\/\/gpswp.com\/apwealthmanagement\/how-will-our-presidential-election-affect-the-stock-market\/","title":{"rendered":"How Will our Presidential Election Affect the Stock Market?"},"content":{"rendered":"<div id=\"body-content\">\n<h3>How Will our Presidential Election Affect the Stock Market?<\/h3>\n<p style=\"font-size:12px;color:#999;font-weight:normal\">November 20, 2015 | <a href=\"http:\/\/gdrive.gradientfinancialgroup.com\/includes\/gdrive\/gi-blog-print.php?id=1254\" target=\"_blank\">Print View<\/a><\/p>\n<p style=\"text-align:justify;margin:10px 10px 10px 5px\">While there are several cycles that can affect the stock market, the presidential term cycle is one that is highly likely to affect the US stock market positively in the coming year.<\/p>\n<p>Many indicators of where we are in a cycle and where we are headed have been proposed over the decades, but most lack logic, i.e., skirt hemlines or the outcome of a major sporting event.  On the other hand we have economic cycles, interest rate cycles and political cycles. These are the most often discussed and best documented.<\/p>\n<p>Politics will be front and center in the media and daily conversations over the next twelve months (as if they haven\u2019t been already). Just as the field of candidates will be narrowed down from 15 currently to 2 major candidates, so too will the field of topics and promises be narrowed down between now and the end of July.<\/p>\n<p>Between now and next November, there will be many vows to improve our economic and social wellbeing. Importantly, this includes pledges to strengthen the flow of public funds into local economies since people tend to vote with their wallets.<\/p>\n<p><b>Republican or Democrat &#8211; will the winning party in a presidential election determine how the stock market will move?<\/b> No, based on historical data. A US Federal Reserve study found that, going back to 1852, superior risk-adjusted US stock market returns one year following a presidential election cannot be linked to a specific political party win. Given this, it would be wise to keep politics disconnected from your portfolio.\n<\/p>\n<ul>\n<li>However, the stock market has gone up during a presidential election year 95% of the time. <\/li>\n<p><\/p>\n<li>Further, a win by the incumbent party would increase the likelihood of a positive year in the markets.<\/li>\n<\/ul>\n<p>As seen in the chart below, the median return for the stock market in the election year was a handsome 10.4 percent.<\/p>\n<p><img decoding=\"async\" style=\"max-width:600px\" src=\"http:\/\/community.gradientfinancialgroup.com\/index.php?attachments\/1310&amp;fs=1\"><\/p>\n<p>To get even more specific, the last seven months of an election year almost always boost stockholder portfolios, with the market up in all but two election years post-World War Two.<\/p>\n<p>Further, volatility declines over the course of a presidential term generally, with the fourth (election) year the least volatile of all.<\/p>\n<p><b>Conversely, one could use the stock market to predict the election since:<\/b><\/p>\n<ul>\n<li>gains in the S&amp;P 500 stock index in the three months prior to the election have been closely tied to the reelection of the incumbent party<\/li>\n<p><\/p>\n<li>declines in the market during that same time period has resulted in a new party in the White House nearly 90% of the time<\/li>\n<\/ul>\n<p>Given the historical outperformance of this upcoming election year, investors should consider the Gradient 50 or Gradient 33 portfolios. These would provide the maximum stock exposure in US markets. The Gradient 50 should also provide some downside protection due to its above-average dividend yield.<\/p>\n<p><span style=\"text-decoration: underline\"><b>Conclusion<\/b><\/span>: While the presidential cycle theory is not guaranteed, it is a positive indicator based on historical data. Volatility has previously dropped over the course of a presidential term. Markets are always affected by a number of dynamics every year, and this will be the case in 2016 as well. Our expectations include an improving economy, improving earnings growth rates and a rising stock market next year. The presidential election could prove to be another tailwind.<\/p>\n<p>As of November 19, 2015<\/p>\n<p>Dow Jones US Moderately Conservative Index is up 1.03% (TR) for the year<\/p>\n<p>Down Jones Industrial Average closed at 17,732.75, up 1.73% (TR) for the year<\/p>\n<p>S&amp;P 500 closed at 2,081.24, up 2.99% (TR) for the year<\/p>\n<p>MSCI Emerging Markets closed down 12.46% for the year<\/p>\n<p>US 10 year Treasury Futures are yielding 2.23%, up 0.06% for the year<\/p>\n<p>WTI Crude Oil futures closed at $40.54, down 24.5% for the year<\/p>\n<p>To expand on these market reflections or discuss other portfolio strategies, please don\u2019t hesitate to reach out to the Gradient Investment team.<\/p>\n<div style=\"text-align:right\"><img decoding=\"async\" src=\"http:\/\/gdrive.gradientfinancialgroup.com\/images\/sig_Montagne.png\"><\/div>\n<h3>Past Market Commentary<\/h3>\n<div class=\"previousUpdate\">\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1218\">Still at Square One<\/a> October 20, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1188\">Fed Holds Interest Rates&#8230;Other Options Available<\/a> September 23, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1158\">Acknowledging Market Corrections<\/a> August 25, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1138\">What Are The Historical Patterns Saying<\/a> August 5, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1119\">Headwinds Becoming Tailwinds: Earnings Growth is Forecast to Accelerate<\/a> July 16, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1095\">The Fed Says&#8230;&#8230;<\/a> June 19, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1080\">Don\u2019t Fight The Fed (or the ECB or the BoJ)!<\/a> May 28, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1055\">Is Market Valuation Telling Us Anything<\/a> May 6, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1029\">The U.S. Dollar is Up 25% \u2013 Who Benefits?<\/a> April 13, 2015<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1009\">Keeping The Forecast: For Now<\/a> March 30, 2015<\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>How Will our Presidential Election Affect the Stock Market? November 20, 2015 | Print View While there are several cycles that can affect the stock market, the presidential term cycle is one that is highly likely to affect the US stock market positively in the coming year. Many indicators of [&#8230;]<br \/><a class=\"read-more small\" href=\"https:\/\/gpswp.com\/apwealthmanagement\/how-will-our-presidential-election-affect-the-stock-market\/\">Continue Reading <i class=\"fa fa-long-arrow-right\"><\/i><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1013","post","type-post","status-publish","format-standard","hentry","category-market-reflection"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Will our Presidential Election Affect the Stock Market? - Asset Protection Wealth Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gpswp.com\/apwealthmanagement\/how-will-our-presidential-election-affect-the-stock-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Will our Presidential Election Affect the Stock Market? - Asset Protection Wealth Management\" \/>\n<meta property=\"og:description\" content=\"How Will our Presidential Election Affect the Stock Market? 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