Presidential Election Year Cycle — Pattern
S&P 500 performance across the 4-year presidential term
Since 1928, the S&P 500 has posted positive returns in election years approximately 83% of the time with an average return of roughly 11.3%. Year 3 (pre-election) is historically the strongest at 16-17% with a 90% win rate. Year 2 (midterm) is the weakest at 3-4%.
| Date | 1M return | 1Y return | 5Y return |
|---|---|---|---|
| 1972-01-03 | +2.3% | +17.6% | +5.1% |
| 1976-01-02 | +11.0% | +18.2% | +48.5% |
| 1980-01-02 | +7.9% | +28.4% | +57.7% |
| 1984-01-03 | -0.8% | +1.9% | +68.8% |
| 1988-01-04 | -0.1% | +8.5% | +71.8% |
| 1992-01-02 | -2.0% | +5.2% | +80.0% |
| 1996-01-02 | +2.5% | +21.4% | +114.1% |
| 2000-01-03 | -3.2% | -11.8% | -18.5% |
| 2004-01-02 | +2.5% | +8.4% | -16.3% |
| 2008-01-02 | -3.6% | -37.6% | +0.8% |
| 2012-01-03 | +3.8% | +14.8% | +77.7% |
| 2016-01-04 | -5.0% |
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Incumbent presidents stimulate the economy ahead of re-election, creating a policy tailwind for equities.
Year 2 averages only 3-4% and contains the deepest intra-year drawdowns.
The presidential cycle is statistically robust but has significant variance. The four negative election years all featured systemic crises.
Calendar patterns earn a place in expectations, not in trades — the cycle's averages are robust but its variance is wide, and the negative election years were all systemic-crisis years. Consider using the pattern to set realistic return expectations across a presidential term while letting valuations and the macro cycle drive any actual allocation change.