4-Year Election Cycle

In the section 4-Year Election Cycles SeasonalCharts.com examines a four-year instead of the typical one-year cycle. There are five charts for every market. First there is the election cycle chart that shows the average trend over the entire four years of the cycle. Additionally, each of the four cycle years is illustrated separately in its own enlarged chart.

The four-year cycle is determined by the US presidential election. 2008 is an election year. We have and the cycle years are:

2008: Election Year
2009: Post-Election Year
2010: Midterm Year
2011: Pre-Election Year

The course of important US markets is largely dependent on whether the current year is an election year or one of the three cycle years following an election. Stocks tend to see an above average increase during the year preceding an election year. The reason for this development is assumed to economic policy before an election. Increasing stock prices and a booming economy sheds positive light on the incumbent political party.

But not only stocks are influenced by the US election cycle. Interest rates and currencies can also be affected. Through the dominance of the US capital markets, international markets are also influenced by the election cycle including the German stock market.