Trends with Benefits
Trends with Benefits #23: Election Cycles with Jeff HirschEd Lopez, Head of ETF ProductAugust 25, 2020
The Stock Trader’s Almanac is in its fifty-third edition this year and it’s a wonderful collection of market data that is presented not only on a calendar basis but also by trading patterns. From this tome of information one can glean ideas for strategies to take advantage of seasonal patterns or prepare for periodic events like election cycles. Given 2020 is an election year this was definitely something I sought to cover with Jeff. Looking at historical data one can ascertain patterns in market behavior that emerge during the run-up and following a presidential election. For example, the market tends to perform better when a sitting president runs for reelection and market performance between August and October has tended to be a presidential predictor. The market also tends to bottom two years after a presidential election no matter which party wins. When you think of the politics involved and how the economy is manipulated to help the incumbent party stay in power some of this is common sense, but it’s interesting to see the data.
While I love talking about the market data, I’ve got to admit I was probably most excited to talk to Jeff about rugby. Not that I went very far in my rugby career, but it had such an impact on my life and I rarely get to talk to someone about it in a professional setting. Beyond the benefits of instilling discipline and teamwork, there’s a sort of international fraternity among those who have played which we talk about.
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Listen for Jeff’s take on work from home, connected home fitness, deglobalization and cryptocurrency.
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