By: Christian Hudspeth of Street Authority
The most recent election was a good night for Republicans, but possibly even better for investors.
That's not necessarily because Republican wins lead to better stock returns, but because historically the market performs better in the year following midterm elections.
In fact, there's a 66% chance that the market will post positive gains for 2014, according to research by StockTradersAlmanac.com.
Looking at stock market movements from every midterm election from 1970 to 2010, their research found that 66% of the time the stock market ended higher from election day to year's end.
And for all midterms since 1970, the stock market gained an average of 2.1% from election day to the end of year. You can see for yourself in the table below:
If a 2.1% gain possibility over the next two months doesn't sound groundbreaking, then this might.
Holding stocks for a full year after a midterm has historically been very profitable, according to research by Chief Equity Strategist Sam Stovall of SP Capital IQ. Continue reading "How Midterm Elections Could Lead To 17.5% Returns In Less Than A Year"
