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Strange but true: The S&P 500 has been solidly higher in the 12 months after midterm elections in every cycle since 1954, regardless of which party won or lost, according to Yardeni Research. The average one-year growth of the broad market index in the 17 post-election periods was about 15 percent. These facts are on our minds this Election Day as voters cast their ballots amid a tough year on Wall Street. Everyone is wondering when we will see or if we have already seen the bottom of the current bear market. Of course, past performance isn’t indicative of future results, and right now many strategists are concerned that inflation and recession fears could continue to weigh on stocks. We recognize that an uncertain macro environment may complicate the usual upturn after the interim period. However, we believe that history is worth highlighting to the members of the Club. We also wanted to zoom in on it through a club-specific lens, analyzing how 31 stocks in Jim Cramer’s charitable trust have performed in the 12 months since the recent midterm elections. Here’s what we did, with a few caveats. We looked at just the last five midterms – 2018, 2014, 2010, 2006 and 2002 – to see which current Club stocks had the biggest gains in the 12 months after the election. The average 12-month gain of the S & P 500 after these five elections is 8.3%. One limitation of the exercise is that not every stock in our portfolio has been publicly traded over all five election cycles. Salesforce ( CRM ) and Alphabet ( GOOGL ) held initial public offerings in the summer of 2004, while Facebook parent company Meta Platforms ( META ) went public in May 2012. While we chose to highlight the top performers, there were also underperformers and stocks that have been in the red in each of the past cycles we’ve looked at. This exercise is designed to show how much stocks have moved during these bullish cycles, not why they have performed the way they have. 2018 Election These are the five Club stocks with the biggest gains between November 6, 2018 – when the interim deadlines were – and November 6, 2019: Advanced Micro Devices ( AMD ), Microsoft ( MSFT ), Qualcomm ( QCOM ), Procter & Gamble ( PG ) and Estee Lauder (EL). The S&P 500 index advanced by 11.7% during this period. Election 2014 The S & P 500 rose 4.5% between November 4, 2014 and November 4, 2015. These are the Club’s five best-performing stocks over the past 12 months: Amazon ( AMZN ), Starbucks ( SBUX ), Constellation Brands ( STZ ), Nvidia ( NVDA ), and Meta Platforme. Election 2010 Between November 2, 2010 and November 2, 2011, the S & P 500 rose 3.7%. These are the top five club performers during this period: Estee Lauder, Starbucks (SBUX), Humana (HUM), Bausch Health (BHC), and Costco Wholesale (COST). Note: This list does not include Coterra Energy (CTRA), which jumped 163% in the 12 months following the 2010 interims. The company was then known as Cabot Oil & Gas. In 2021, it was renamed Coterra after the merger of all shares of peer companies with Cimarex Energy. 2006 Election The S&P 500 rose 6.7% between November 7, 2006 and November 7, 2007. These 5 club names posted the biggest gains this 12 months: Apple (AAPL), Amazon, Wynn Resorts (WYNN), Nvidia, and Google parent Alphabet. Election 2002 Over the past five interim cycles, the S & P 500 posted its largest 12-month gain of 14.9% between November 5, 2002 and November 6, 2003. These are the most successful club holdings in this section: Amazon, AMD, Cisco Systems (CSCO), Humana and Wynn Resorts. The Club’s Final Thoughts Only two of the Club’s holdings have outperformed the S&P 500 in each of the 12-month windows since the midterm elections: Apple, which was the biggest winner in the 2006 cycle, and Honeywell ( HON ), which even considered never did not crack the top five in any given year. Interestingly, there were five club stocks — Apple, Amazon, Honeywell, Costco and Estee Lauder — that were positive in the 12 months after the midterm elections in each of the last five election cycles. Finally, it’s also worth reminding everyone that performance in the 12-month period following a particular event—in this case, a midterm election—is just a moment in time and doesn’t necessarily reflect how a company’s core business fared during that period. . A wide variety of factors—some company-specific, others more macro in nature—affect short-term stock trading. But in the long run, the best companies tend to be rewarded by the market. (See the full list of Jim Cramer’s charitable trust stocks here.) As a CNBC Investing Club with Jim Cramer subscriber, you’ll receive a trade alert before Jim closes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC, he waits 72 hours after the trade alert is issued before he executes the trade. THE ABOVE INFORMATION IN THE INVESTING CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY SHALL EXIST OR BE CREATED BY YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
People walk past the New York Stock Exchange (NYSE) on Wall Street on July 12, 2022 in New York City.
Angela Weiss | AFP | Getty Images
Strange but true: The S&P 500 has been solidly higher 12 months after a midterm election in every cycle since 1954, regardless of which party won or lost, according to Yardeni Research. The average one-year growth of the broad market index in the 17 post-election periods was about 15 percent.
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MY NUMBER 1 RECOMMENDATION TO LOSE WEIGHT: CLICK HERE
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