Stocks: Now Could Be the Time to Sell, Study Shows

A pair of Pepperdine University economists, who analyzed years of Wall Street data and electoral calendars, detected patterns of stock market profits that coincide with presidential terms, the university reported Tuesday.

Marshall Nickles and Nelson Granados found that the historical record shows maximum stock market profits are achieved by investors who go into the market in the October of the second year of a presidential term, and who sell
at the very end of the fourth year of the term.

The professors, using Dow Jones Industrial Averages and presidential cycles dating back to the 1950s, found that maximum profits occurred during the latter portion of nearly every four-year presidential term.

The big exception, they noted, was in the financial free-fall at the end of George W. Bush's term in 2008, when nearly all investors lost money.

"We feel that with the advent of merging international markets and modern technology, the more the average investor knows about the interrelationship between politics, economics and the stock market, the more equipped he or she will be," Nickles and Granados wrote in their study.

Their findings are detailed in Pepperdine's online peer-reviewed journal, the Graziadio Business Review.

—City News Service

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