This is something I noticed in both 2016 and 2018, and looking back over the Dow Jones it does seem to be a thing: there's always a dip at some point leading up to every election. I kind of suspect this is because a lot of investors always panic fearing the other Party will turn the world into Mad Max, and then relax afterwards regardless of who wins when they see the sun come up the next day (although sometimes this does seem to happen a bit before the election).
This kind of makes me think it would be a good strategy to move some or all of my stocks to bonds two months before every election, and move them back on election day (this year I was going to move the bonds I was already holding to stocks since I'm thirty years from retirement anyway, but noticed the dip and delayed accordingly). I might not always make money, but I figure it would at least keep my money safe during periods that are inclined to be unstable.
However, if it was really this simple I feel like everyone would have already caught on. Is this a good strategy?
Edit: I realized I shouldn't risk confirmation bias, so I decided to look back over the past ten election years. I also added the caveat that I would move the money back into stocks either at the beginning of November, or when the Dow Jones hit it's lowest point that year. I found that this would have been to my benefit in six of the past ten election years. For comparison, I did the same with non-election years, and found that it would only have been to my benefit in three of them.
Submitted November 09, 2018 at 08:20AM by Serpenthrope https://ift.tt/2zEyRui
