Saturday, January 01, 2005

Election Year Review

Wanted to post a close to the election rally effect posted back in November. You can read the first post on the study here. And a follow-up on the study here.

For those who don't remember, this study assumes you would have invested at the close of the last day in October and sold at the close on the last day of December of the same year within an election year. Here are the results of the study encompassing prior election years:

S&P 500
Time Period: 1964 - 2000
Total Elections: 10
Total Win%: 70.00%
Total Losing%: 30.00%
Average Profit: 3.85%
Average Loss: -2.74%
Largest Gain: 6.50%
Largest Loss: -7.63%

Time Period: 1916 - 2000
Total Elections: 22
Total Win%: 68.18%
Total Loss%: 31.82%
Average Profit: 5.63%
Average Loss: -5.44%
Largest Gain: 18.95%
Largest Loss: -15.29%

So, how did this election year compare?

The S&P 500 moved 3.86% from its October close and the DJ-30 has moved 3.99% accordingly.

The S&P 500 just about nailed its average profit of 3.85%. The DJ-30 missed its average profit of 5.63% by 1.64%. Overall, not a bad year for the study.

I hope all is well for everyone this New Year's Day. That you're home safe and recovering well from the New Year's Eve festivities. And hopefully, not too tired and stressed from the bowl games (especially if you're team lost!). What is up with my Aggies?!?

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