Presidential Election Cycle Theory

Presidential election cycle theory

A theory that stock market trends can be predicted and explained by the four-year presidential election cycle.

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Presidential Election Cycle Theory

A theory of market performance stating that markets are weakest in the year following a presidential election, regardless of whether a new president or party takes power. This theory held up well until the late 20th century, when the market began performing strongly during the first years of a president. For example, the first year of George H.W. Bush's presidency saw strong market performance, but his administration ended with a recession.