YEAR 3 OF THE PRESIDENTIAL CYCLE
THE HISTORICAL RECORD
From the Chart Store Weekly Blog for the week ending January 5, 2007
by Ron Griess
Proprietor, The Chart Store
www.thechartstore.com
January 9, 2007

Stock market action during the Presidential Cycle is often an interesting topic.  We present below the historical record of the Dow Jones Industrial Average (DJIA) in the third calendar year of the cycle.  We begin with a statistical table of all third calendar years of the Presidential Cycle since 1891.

Table 1

The following table breaks down the same statistics by political party. 

Table 2

We have constructed the following weekly composite charts of the DJIA for all 29 presidencies, 13 Democratic presidencies and 16 Republican presidencies.  While composite charts are interesting, we would caution that they are drawn from a limited number of observations and are averages of that limited data set.

Chart 1

Chart 2

Chart 3

The following two charts are the worst and best of third calendar years.

Chart 4

Chart 5

Summary Points

• The DJIA has risen 24 times and fallen 5 times in the 29 third calendar year of the Presidential Cycle since 1891.
• The overall, average gain for the 29 third calendar years is 12.31%, with the 16 Republican presidencies averaging gains of 5.12% and the 13 Democratic presidencies averaging gains of 21.14%.
• Herbert Hoover wins the prize for the worst third year (1931, down 52.67%) while Woodrow Wilson (first term) wins the prize for the best third year (1915, up 81.66%).

© 2007 Ron Griess
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