Tuesday, August 7, 2012

Does the Stock Market pick the President?


Does the stock market influence the presidential election?

InvestTech Research of Montana has concluded that the direction of the stock market during the last two months before the election has the greatest influence on the outcome. The Market has predicted 90% of the presidential elections since 1900. There have been only four exceptions to date: 1956, 1968, and 2004. A February 24, 2012 article about this research by Lauren Fox of US News summarizes the results. Of 28 elections during the period, there were 16 during which the stock market went up preceding the election and the incumbent was re-elected in 15 of them. There were 12 elections during which the stock market fell preceding the election and the incumbent lost in 10 of them. 

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