What Historical Trends Say
Jeffrey A. Hirsch and J. Taylor Brown observe in the “Stock Trader’s Almanac 2010” that 2010 has two factors on the proverbial wall of worry: midterm elections will be held in November and the fact that it is a “zero” year.
Midterm election years tend to be the third worst in the four-year election cycle. Often, crises and dissatisfaction with the incumbent party have coincided with market drops.
Years ending in a zero have also not been kind to investors. The Dow has declined during eight out of the last 12 years that ended with a zero. The blue-chip average did, however, post gains in 1950, 1970 and 1980.
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