Seasonal Analysis of the S&P 500 shows a strong bullish tendency for the index in 2023. S&P 500, a stock market index that measures the performance of 500 large-cap companies listed on the stock exchange in the United States, has a strong tendency to be bullish in the year before a presidential election. This is a pattern that investors should consider when planning their investment strategy in 2023.
Historically, the index has tended to be bullish in the year before a presidential election, with only a few exceptions. The most significant drop in the S&P 500 in the year before a presidential election occurred in 1931, during the Great Depression when the index lost 48.77%. However, this was an exceptional case due to the severe economic turmoil that greatly affected the stock market. The only other negative years in the S&P 500 the year before a presidential election were 2015 and 1939, with losses of 0.69% and 3.44%, respectively. These losses are relatively small compared to the overall performance of the index.
The Bar Chart below shows the gain/loss of the S&P 500 from Jan 1 to Dec 31, in the years before a presidential election. As seen from the chart, the S&P 500 has been profitable in the year before the presidential election for 88% of the years, with only a 4.1% chance of a significant drop. This is an attractive pattern for investors who are considering long investments in the stock market in 2023.
To further analyze the S&P 500’s seasonal performance, we also looked at the first six months of the year, from Jan 1 to Jun 30, in the years before a presidential election. From the bar chart below, it can be seen that the S&P 500 has been profitable for 92% of the years, with only 1931 and 1939, the great depression and the year World War 2 started, being negative in the first six months of the year before a presidential election. The S&P 500 has been profitable for 21 years in a row in the first six months of the year before a presidential election with an average of 11.52% profit.
It’s worth mentioning that past performance does not guarantee future results, and other factors such as economic conditions and political developments can also affect stock market performance. If the S&P 500 does drop sharply in 2023, it would signal a major shift in the overall market sentiment since the Great Depression. However, the seasonality of the S&P 500 in the year before a presidential election is an attractive pattern to consider when planning an investment strategy.
Investors can use TradeSeasonals.com to discover seasonal opportunities in the S&P 500 as well as other financial instruments. This platform is FREE for investors to use and discover the top 10 seasonal opportunities for financial instrument groups for the current day. Users can come back every day and view the top Seasonal Opportunities for all financial instruments for that day.
In conclusion, the S&P 500 has shown to be seasonally bullish in the year before a presidential election, with a 92% winning rate in the first 6 months and an 88% winning rate for the entire year. With only a 4.1% chance of a significant drop, it is an attractive pattern for those who are looking to capitalize on the seasonality of the stock market. Investors can use TradeSeasonals.com to discover more seasonal opportunities in the S&P 500 and other financial groups. As always, it’s important to remember that past performance does not guarantee future results, and other factors such as economic conditions and political developments can also affect stock market performance