Buying the S&P 500 on US midterm election day and holding until June 30 of the following year has produced positive returns in every instance since 1942, averaging roughly +16% with a range of about +2.5% to +30.8% across all cycles, regardless of which party controlled the White House, Senate, or House.
» If you bought on Midterm Election Day, held through June 30th of
the following year the S&P 500 was higher EVERY. SINGLE. TIME. «
the following year the S&P 500 was higher EVERY. SINGLE. TIME. «
Midterm years themselves typically deliver the weakest average returns (~4–5%) and highest volatility/drawdowns in the four-year presidential cycle, with weakness often concentrated in Q3/Q4 ahead of November; the rebound usually begins in late Q4. The subsequent periods from the specific midterm-election-day-to-next-June-30 have been positive in every cycle examined, averaging ~16–18%.
Cycle rankings place Year 3 (the post-midterm/pre-election year) as the historical "sweet spot," typically outperforming Year 1 (~4–7%), Year 2/midterm (~3–5%, weakest), and Year 4/election (~6–8%), with average gains often cited in the 10–17% range as incumbents frequently pursue pro-growth policies.
Cycle rankings place Year 3 (the post-midterm/pre-election year) as the historical "sweet spot," typically outperforming Year 1 (~4–7%), Year 2/midterm (~3–5%, weakest), and Year 4/election (~6–8%), with average gains often cited in the 10–17% range as incumbents frequently pursue pro-growth policies.
