One of the arguments all of us will hear time and again as the new year begins is that 2008 will be a good year for stocks because it is a Presidential election year. Stocks have gone up 13 of 14 Presidential election years since 1950. The reason, so the argument goes, is that the incumbent does everything he can to juice the economy so that he can win reelection or at least his party can.
But sometimes greater forces are at work. Consider, for example, 2000. No matter what Clinton did, it’s hard to imagine he could have staved off that nasty bear market. One wonders whether the same applies this time around.
“Elections Don’t Mean Vote For Stocks” (subscription required), Scott Patterson, “Ahead of the Tape” column, Friday December 28, 2007, The Wall Street Journal