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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%.
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.