by Michael Tarsala
Stocks tend to run strongly ahead of presidential elections.
They tend to really do really well toward the latter part of the year when voters are preparing to go to the polls.
That makes the case for a potential rally in August and September.
Since 1900, the Dow Jones Industrial Average has gained an average of 7.3% in presidential election years, according to InvesTech research – and that includes the terrible performance of 2008, as the U.S. entered the depths of the financial crisis.
That makes this chart from Bespoke Investments all the more interesting:
Source: Bespoke Investment Group
The to-date performance of the S&P is in blue. The performance of past election years going back to 1928 is in red.
If the historical norm holds, the S&P has a good chance to challenge and perhaps even overtake its year highs set in April over the next six weeks.