Fisher Investments Releases YouTube Video on 2012 Election

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Video examines historical stock market performance in presidential election years

Average S&P 500 total annual returns during a re-election year vs. an initial election year

Understanding how markets have behaved over time, and how they may be influenced by presidential election cycles, is powerful insight investors shouldn’t miss.

Today, Fisher Investments released a new video on the Fisher Investments YouTube channel discussing market trends in presidential election years. The short video covers an often overlooked influence on market performance the firm calls the Presidential Term Anomaly—a pattern where the third and fourth years of a presidential term have been historically good years for stocks.

In illustrating this pattern, Fisher Investments explains Presidents often push for major legislation in the first half of a term when political power is likely to be greater—resulting in redistribution of money, changes in property rights, and regulatory reform. This, among other factors, is a reason the first and second years of a president’s term are typically more variable, with lower average returns. During the second half of a president’s four year term, there is generally decreased legislative risk, and stocks have tended to have positive annual returns.

The video also discusses the two possible outcomes for 2012—either the country re-elects Obama or newly elects a Republican—and analyzes how both scenarios have affected stocks in the past. In both cases, the video demonstrates stocks have done well historically, averaging a 14.5% return in years when a Democrat is re-elected, and 18.8% when a Republican is newly elected.

Understanding how markets have behaved over time, and how they may be influenced by presidential election cycles, is powerful insight investors shouldn’t miss. Go to the Fisher Investments YouTube channel to learn more about the Presidential Term Anomaly and the possible impact of the 2012 presidential election on your portfolio: How Will the Election Year Impact Your Portfolio?

About Fisher Investments

Founded in 1979, Fisher Investments is an independent, privately-owned money management firm with more than $44 billion (as of 6/30/11) under management. Fisher Investments maintains two principal business units, Fisher Investments Institutional Group and Fisher Investments Private Client Group, which serve a global client base of diverse investors. Fisher Investments’ clients include over 100 large institutions and over 25,000 high net worth individuals. Founder and CEO Ken Fisher has written the Forbes "Portfolio Strategy" column for 27 years, has written 7 books on investing and personal finance (4 of which are bestsellers), and was recently named by Investment Advisor magazine as one of the 30 most influential industry individuals in the last 30 years (Thirty for Thirty, May 2010). For more information visit http://www.fisherinvestments.com/.

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David Eckerly
Fisher Investments
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