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Stocks have always rallied in the year after midterm elections

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Stocks have always rallied in the year after midterm elections

Better than average returns too

Sam Ro, CFA
Nov 8, 2022
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Stocks have always rallied in the year after midterm elections

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From LPL Financial (via Yahoo Finance):

“Markets historically have done well in the year after midterms [Figure 2]. In fact, they have been higher 18 out of 18 times in the following year dating back to 1950, with nearly identical historical returns under Democratic and Republican presidents. This is no guarantee that it will happen this time, of course, and remember, the S&P 500 has been higher about 80% of all years over that span, so 18 out of 18 is only somewhat above expectations.

Still, there are a few possible fundamental reasons for market strength following midterm elections. Primarily, the uncertainty associated with the election is behind us, and markets don’t like uncertainty. But on top of that, midterms usually provide something of a course correction from presidential elections, as discussed above, and markets may anticipate prospects of a better policy balance ahead, regardless of who is in the Oval Office.“

Read more in this piece I wrote for Yahoo Finance.

And as always, past performance is no guarantee of future results.


🙋🏻‍♂️You’re looking at an entry for TKer Notes, a new offering I’m currently exploring for subscribers. TKer Notes would be a place where I’d compile all the eye-catching, thought-provoking stuff I come across. It wouldn’t necessarily come with the context you get with TKer’s main newsletter offerings. Writing a whole newsletter takes time!

If this were something I moved forward with, you’d be able to subscribe to it separately (because I know the last thing many of us need are more emails). As always, everything I do is informed by your feedback. If you have a second, check out TKer Notes. And share your thoughts with me at sam@tker.co.

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Stocks have always rallied in the year after midterm elections

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