The Presidential Election Cycle
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Many researchers have argued that a presidential cycle exists within the stock market. The research will be continued by examining movements and returns of the market for the 21st century. Past results form the presidential cycle have revealed a repeating pattern in each year of an administration: Year 1 and 2 consistently revealed declining returns on equities while year 3 and 4 produced positive returns. Two presidents have been elected in the past 16 years. Their administrations will be split into 4 terms in order to examine the returns of each year. If the returns match the patterns of past experiments, then the hypothesis of the presidential cycle may hold its credibility. As the 2016 presidential election approaches, this research may give investors and voters alike some insight in selecting the next President of the United States.