Sunday, August 02, 2015 12:18am
North Adams, MA now: 63 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
LOG IN | REGISTER NOW   

Home About Archives RSS Feed
Independent Investor: Time Is Running Out For The Presidential Cycle
By: Bill Schmick On: 08:21PM / Thursday June 16, 2011

Here we are in the middle of June, in the third year of a presidential cycle, and no one is talking of its historical bullish implications. Despite all the present gloom and doom about the economy and the stock market, here's something to remember. There has never been a negative return in the stock market during the third year of any president's four-year term since 1939.

Sure, there could always be a first time. And if you look at the historical data and compare it to this cycle, you can understand why. Usually, the year immediately following a president's election is negative. Barak Obama's first year, however, was extremely positive. The stock market lows were put in March of that year and the S&P 500 Index gained 23.5 percent in 2009 and then another 12.8 percent last year.

Right now, all three stock market averages are roughly flat for the year after climbing as high as 8.9 percent earlier in the year. Most pundits believe we still have more downside ahead of us. How much is the question. Some strategists believe we are closer to a bottom than a top; me included. Of course, we could technically have an up year by simply gaining 1 or 2 percent from here. Yet, only once in the last 72 years has the S&P 500 closed more than 10 percent below its previous end-of-year close during a president's third year in office. On the other hand, the index has gained over 10 percent (or more) at least once during the third year on 15 out of the last 17 occurrences. We have yet to do that.

There is a political rhythm to this cycle that makes a good deal of economic sense. Initially, when a new president is elected, he makes the hard choices and absorbs any negative fallout in the economy in his first and second years. Raising taxes or cutting spending are simply two examples of a new administration "biting the bullet" early on. By year three, re-election considerations come to the forefront.

The state of the economy is usually a major determinant on who will be elected and what party will dominate the political arena. This election cycle it is already clear that the economy will be the major factor in next year's presidential election. Traditionally, the sitting president will do everything in his power (whether a lame duck or not) to insure that his party garners the most votes possible.

The problem this time around is that the Obama administration has already done everything in its power to both stimulate the economy and get people working again. The Federal Reserve Bank and its board, which is ostensibly above politics but in reality owes their positions to the sitting administration, is already doing all they can to stimulate the economy. Tactics such as reducing interest rates and other "easy money" policies are already in place and have been for two years.

I have often said that when things look the darkest, that's usually the time to pay attention to the facts and not get sucked down into an emotional morass. Although the presidential cycle is not, nor will ever be, the determining factor in whether this market finishes the year with a loss or a gain, I believe it is simply another arrow in my quiver when I say that good times lie ahead for the market and the economy this year.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at (toll free) or e-mail him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.



Tags: president, markets, historical      
News Headlines
Aggie Fair Crowns 2015 Prince & Princess.
SteepleCats Win Regular Season Finale
Lanesborough 11U Bulldogs Fall in Regional Opener
First Responders Receive Tactical Training at Drury High School
Our Neighbors: The Teacher
Fall Foliage Festival Calling on All Grand Marshals
Berkshire Force 14s Open World Series With Two Wins
SteepleCats Clinch Playoff Spot With Road Win
Guest Column: Cheshire Override Will Fund Schools
Pittsfield Offers Community Development Director to Florida Woman

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (176)
Independent Investor (238)
Archives:
August 2015 (1)
August 2014 (6)
July 2015 (6)
June 2015 (8)
May 2015 (6)
April 2015 (8)
March 2015 (6)
February 2015 (7)
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
Tags:
Markets Interest Rates Bailout Rally Economy Europe Japan Crisis Debt Fiscal Cliff Housing Greece Congress Recession Deficit Pullback Federal Reserve Stocks Selloff Election Stock Market Currency Jobs Fed Euro Stimulus Retirement Commodities Banks Debt Ceiling Energy Taxes Oil Europe Metals
Popular Entries:
The Independent Investor: Don't Fight the Fed
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
Recent Entries:
@theMarket: Month-End Musings
The Independent Investor: Supermarkets Evolve to Survive
The Independent Investor: Are You Ready for El Niņo
@theMarket: O Ye of Little Faith
The Independent Investor: When 'No' Means 'Yes'
@theMarket: Global Markets Weather a Wild Week
The Independent Investor: Same-Sex Marriage Good for Business
@the Market: Second Quarter Earnings on Deck
The Independent Investor: Tiny Houses Gain Appeal
@theMarket: From Russia With love


2015 Adams Aggie Fair
The 41st annual Adams Agricultural Fair opens this weekend...
Blue Moon Rooftop Party
A sold-out crowd partied under a blue moon and atop...
Down Street Art and Polish...
Thursday was a big night in the Northern Berkshires with...
Park Street Fair (Hi-Jinks...
Park St. was closed off to traffic Monday night for the...
Gather-In Festival 2015
The annual Gather-In, a celebration of Pittsfield's...
'Romeo & Juliet' @ Pittsfield...
Free performances of 'Romeo & Juliet' run through Aug. 2 at...
LaFesta Baseball 2015
The LaFesta Baseball Exchange marked its 25th anniversary...
Bulldogs Win Cal Ripken State...
The Lanesborough Bulldogs used a big base-running play to...
Spark @ Naumkeag
Berkshire Creative held its July Spark mixer at the...
LL: Pittsfield vs Longmeadow
The 10- and 11-year-old Pittsfield National Little League...
Pittsfield Polish Picnic
St. Joseph's Church in Pittsfield hosted the annual Polish...
Pittsfield Babe Ruth WMass...
The Pittsfield Babe Ruth 15-year-old All-Stars beat Holden...
Shire City Sessions July 2015
The inaugural Shire City Sessions drew a crowd to hear US...
3rd Thursday June 2015
Pittsfield's 3rd Thursday monthly street fair featured...
Cheshire Block Party
Cheshire's first Block Party featured live music, food,...
Berkshire Museum Science...
The Berkshire Museum in Pittsfield hosted a free evening of...
2015 Adams Aggie Fair
The 41st annual Adams Agricultural Fair opens this weekend...
Blue Moon Rooftop Party
A sold-out crowd partied under a blue moon and atop...
Down Street Art and Polish...
Thursday was a big night in the Northern Berkshires with...
Park Street Fair (Hi-Jinks...
Park St. was closed off to traffic Monday night for the...
Gather-In Festival 2015
The annual Gather-In, a celebration of Pittsfield's...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings |
Advertise | Recommend This Page | Help Contact Us
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2012 Boxcar Media LLC - All rights reserved

Privacy Policy| User Agreement