Masters in Business Jeff Hirsch on Presidential Market Cycles
19 snips
Jan 29, 2025 
Jeff Hirsch, Editor of the Stock Trader’s Almanac and author of "Super Boom," dives into the dynamics of presidential market cycles. He explains how newly elected presidents can significantly influence market performance, especially in their third year. The discussion unveils surprising trends, such as the Dow’s behavior during election years and how economic conditions play a role. Hirsch also shares strategies for investors to navigate these cycles, emphasizing the importance of a long-term perspective during turbulent times.
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Presidential Cycle Theory
- The Presidential Cycle theory suggests presidents influence markets by boosting the economy in their third year to improve reelection chances.
- This leads to policy changes and economic manipulation, affecting market trends.
Post-Election Year Performance
- Post-election years have shown improved market performance since World War II, potentially due to continued economic stimulus.
- This suggests a positive outlook for 2025, with an estimated 8-12% market growth.
Third-Year Market Strength
- The third year of a presidential term is historically the strongest for markets, likely due to pre-election economic stimulus.
- Governments take various actions, from fiscal spending to direct payments, to boost the economy and voter satisfaction.
