Sub-Par Performance by Market in Pre-Election Year Drama

by James B. Cloonan

Sub Par Performance By Market In Pre Election Year Drama Splash image

The year 2007 was a below-average year for the general market—and it was exceptionally low for a pre-election year.

The average return for the S&P 500 during the year before an election is 21.7%; for all years, the average is 10.4%. However, this past year the S&P 500 came in below both figures at 5.5% (coincidentally, the Vanguard Total Stock Market Index fund, our benchmark in Figure 1, also returned 5.5% in 2007). The Model Mutual Fund Portfolio did considerably better at 10.2%, but there was wide disparity within the portfolio.

The superior performance of the Model Mutual Fund Portfolio was due to one fund—CGM Focus CGMFX—which was up an astounding 80% in 2007.

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James B. Cloonan is founder and chairman of AAII.


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