By: Tom Gentile
on April 17th, 2023
A Presidential Cycle is a term of 4-years. After 4 years they can either ride off into the sunset or run for a second term. Regardless whether they run or not, we want to focus our talk today on what comes of the financial markets performance the President’s third year in office.
3rd Year of a Presidential Term
We are in year three of President Biden’s first term in office. Historically the third year of a Presidential cycle/term is a bullish one for the markets. Here is a table from Schaeffer’s Research showing the average return in a President’s third year.
There is no guarantee the third year will be bullish, but history shows that tends to be the case.
A factor that many speculate is the cause for this third-year bump is the President rally start trying to implement programs and policies that are found in favor with the majority of his/her constituents, and they really try and come through on promises made to get elected in efforts to appeal to enough of the masses to put him in favor of getting reelected.
Whether you are voting for the current President again, if he is even running), or not is beside the point.
Recognize the data and the past history and anticipate a favorable market, that despite all the current concerns that are still there, this component – this observation is out there and to be considered in your overall approach to trading options in this market.
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Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
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