Pre-election Hyperbole

Pre-election Hyperbole

by Mary Suplee on Oct 26, 2018

Why does it seem that people always start getting crazy around elections? I blame television, news websites and commentators. It could be the bombardment of our senses by all the television ads telling us how bad everything is and how urgent it is to fix stuff before the world as we know it ends. It could be all the hyperbole is needed to get us to click on a link so the writer can earn a little more income with each click but it certainly seems to me that there's a lot of animosity and anxiety running up to election season that mysteriously dissipates shortly thereafter.

The question is what will happen after the midterm elections? The answer: who knows! We do however have some historical sense of what might happen. There has not been a down year in the stock market after a mid-year election since 1942. I don't know what the economic explanation for this is or if this is just a random thing but it's certainly interesting. Maybe it is the collective relief of not having to listen to campaign speeches and advertisements that makes people so buoyant.

 In each of the years following the mid-term elections, US large stocks have averaged increases of over 17% . What will this time bring? The same answer: who knows!

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