S&P500 Over Election Years.
Note: – Purposely simplified, mainly so that my simple brain can follow it…
We hear so much in the news, be it financial media or even shares sites/magazines on how markets can be seriously shaken during US Election time.
At the moment, everything seems to be going crazy and so many comments being bandied around about who is best suited to this position…. (in the case of what we do, we are talking about the economy)
I am sure many have a strong opinion on how this will go, but just for a moment, let’s detach all emotional bias on this and let’s look at the charts (well, I am only listing 1 chart. There are others that give more information but I will keep this simple)
The percentages on the chart are averages, give or take but close enough, and bear in mind that the chart is only from Oct to Oct within the election years as we don’t have any data past this point for today’s, so I tried to keep some consistency.
Take from this what you will but my take is, don’t pay too much attention to the analysts predicting crashes, or even markets soaring. Just stick with your plan and let the markets do their thing.
What this means is that if you had invested £10,000 in 1996 and just left it there until today, your £10,000 would now be worth around £43,500.
Of course, if you’d traded the stocks instead of just leaving a lump sum on the Index, you could have made a whole lot more, but considering the serious dips it took over the years, it isn’t a terrible return.
Bottom line, it doesn’t matter what the news is reporting and all the scaremongering that goes with it, the charts never lie – As a wise Trend Trader once said, “Don’t Believe The Hype“… Or was that Public Enemy?
Detachment and having a Mr Spock mindset towards stocks and data is key in this field.
As a few know my trading methods, you’re probably wondering how I am going to Segway this into Trend Trading!
Actually, I am not. I wrote this mainly to help newer traders get a basic understanding and feel of what goes on around this time and not to buy into some of the fear that goes with it. Fortunately, as one that only follows chart analysis, this is only noise to me and finance news is only watched for entertainment'(ish) purpose…