Since 1949, the typical pattern of a Post-Election Year is generally flat until late March. The second and
fourth quarters are notably bullish, while the first and third quarters
tend to be less so. A significant correction in the third quarter is usually followed by a bull trend into year-end. Since 1981, the average trend in Post-Election Years has followed a similar structure but with consistently higher returns (average performance of all Post-Election Years since 1949 +8%, since 1981 +15%).
Spring Low – Summer High – Fall Low – Bull into Year-End. Post-Election Years with 1st-Term Democrats +14%, 1st-Term Republicans +1%.
That
said, Post-Election Year returns have historically favored 1st-Term
Democrats. Since 1949, there has been only one instance of a loss during
a Post-Election Year with a 1st-Term Democrat, while 4 out of 6 1st-Term Republicans saw losses.
Data suggests caution in the third quarter during a 1st-Term Republican administration, and the first quarter is typically the worst-performing. Swing traders should wait for the Spring Low to occur between late March and early April before entering long positions. Post-Election Years generally show strong second-quarter performance with a consistent bull trend from the Spring Low to the Summer High (which can occur as early as mid-May), with an average return of around 4%. The Summer High period, from June
to August, sees positive returns only in about one-third of
Post-Election Years.
The
third quarter often trends sideways or down into the Fall Low in late
September, with an average decline of around 7% from the Summer High. Since 1949, only one Fall Low to Year-End period has resulted in a loss, compared to an average gain of 7.6%. Since 1981, every Post-Election Year has seen positive gains from the Fall Low, making the Fall Low to Year-End rally the most consistent trend.
Since 1981, each Post-Election Year has closed above the lows of
September, October, and November, even if some years briefly dipped
below.
January Market Performance: Last 21 Years (2004–2024), Post-Election Years (1950–2021), and 2025.
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