Will Midterm Elections Calm the Market?

Historically, midterms have turned markets around... [Shield] AN OXFORD CLUB PUBLICATION [Liberty Through Wealth]( [View in browser]( SPONSORED [Why This $2 "Next Gen Crypto" Could Be Bigger Than Bitcoin]( [EKCoin]( The Wall Street Journal Calls It the "Latest Cryptocurrency to Surge." [Here's Why It Could Be Bigger Than Bitcoin.]( EDITOR'S NOTE Matt Benjamin notes that the market has been climbing in recent days - perhaps due to investors anticipating a better political mix after the midterm elections. Of course, there are many other factors involved at the moment - the Federal Reserve, the war in Ukraine and oil prices are just a few. Speaking of... [the energy crisis in Europe is sending shockwaves through European stocks](. Investors are pouring out of European stocks... Withdrawals from European funds just hit the highest level since the Brexit panic. If Europe goes into a deep recession... the American stock market could be hit hard too. But Alexander Green believes Europe will actually come out of this situation in a better position than ever before - [thanks to this one “relief” stock](. [Find all of the details in this tell-all interview.]( - Nicole Labra, Senior Managing Editor THE SHORTEST WAY TO A RICH LIFE [How the Election May Impact Your Portfolio]( [Matt Benjamin | Senior Markets Expert | The Oxford Club]( [Matthew Benjamin]( The gap between Democrats and Republicans is only growing. Republicans continue to move to the right while Democrats journey left, [recent studies show](. It can be dispiriting for politically moderate Americans. But members of both parties do have one thing in common (I hope): They want a [secure financial future for themselves and their families](. And if they own investments, they want to see them grow in value. So with midterm elections right around the corner - Election Day is November 8 - it's worth asking, how will this election impact the market and your portfolio? First of all, this is a big election that could dramatically rearrange the current configuration in Washington. Republicans need to gain just one seat to take control of the Senate and five to take the House. If they win either chamber (almost certainly the House and probably the Senate), we'll revert to a divided government. But that is not necessarily a bad thing... SPONSORED [Join Marc Lichtenfeld's Easy Income Challenge...]( [Easy Income Challenge]( And discover a simple way to generate at least one income check every month! [CLICK HERE]( No More Stimulus Since World War II, the market has returned nearly 8% during periods of divided government. Sometimes a little gridlock - and the lack of major policy initiatives that comes with it - can be good for stocks. And our current economic problem, inflation, has historically been lowest under Democratic presidents when they've had to contend with a split Congress. That certainly makes sense in the current context. With Democrats in control of Congress in 2021, the White House was able to push through $1.9 trillion in COVID-19 relief in March of that year. By providing so much stimulus when the economy didn't need it, the legislation [is at least partly responsible for the inflation we're now experiencing](. If Republicans win the House or Senate, President Biden won't be able to revisit the items of his “Build Back Better” agenda that weren't passed. More generally, there's a strong historical correlation between stock market performance and midterm elections, according to research from Charles Schwab. For 17 of the 19 midterms since 1946, the market performed better in the six months following the elections than it did in the six months leading up to them. [Research from U.S. Bank]( confirms this. The S&P 500 has historically underperformed in the year leading up to midterm elections. That's the case this time too (unless we have one hell of a rally over the next week). Right now the S&P 500 is down about 16% over the last 52 weeks. But in the 12 months after midterm elections, the market has historically rallied for an average return of 16.3%. And the one- and three-month returns after midterms have significantly outperformed the returns for those periods in years with no midterm elections. Wouldn't that be welcome! Of course, every midterm election year is different. Often, post-midterm markets rally because they're anticipating new spending legislation that will boost the economy. That's not the case this time, of course. As I wrote above, some brakes on major spending and tax initiatives would be a good thing for this economy and market. And that would come from Republicans gaining control of one or both houses of Congress. Turning Bullish? Finally, the Stock Trader's Almanac notes that many bear markets have occurred in midterm years, and they often bottom in October, right before the elections. And the turnaround seems to occur in the days just before and after Americans head to the ballot box. Since 1934, the market has seen an average gain of 2.8% in the eight trading days surrounding midterm elections. Interestingly, the market has been climbing in recent days, perhaps because investors anticipate a better political mix after the elections. Of course, there are many other factors involved at the moment - the Federal Reserve, [the war in Ukraine and oil prices]( are just a few. But here's to hoping! Speaking of the war in Ukraine... Russian President Vladimir Putin made his greatest mistake with his unprovoked attack... Now he has cut off all gas supplies to Europe through the Nord Stream 1 pipeline - meaning the European energy crisis just became an outright catastrophe. Putin declared, “We will not supply gas, oil, coal, heating oil. We will not supply anything!” If Europe goes into a deep recession... the American stock market could be hit hard too. But Alex believes [there's one company that stands to put a stop to the madness](... and come out on top. [Tune in to the emergency summit here to learn how to play this energy crisis.]( Invest wisely, Matt [Leave a Comment]( RECOMMENDED LINKS [Virginia Millionaire Warns European Energy Crisis Could Destroy U.S. Economy.]( [See why the world's top investors are getting into “XRI,” the most important tech revolution of the 2020s.]( JOIN THE CONVERSATION [Facebook]( [Facebook]( [Twitter]( [Twitter]( [Email Share](mailto:?subject=A%20great%20piece%20from%20Liberty%20Through%20Wealth...&body=From%20Liberty%20Through%20Wealth:%0D%0A%0D%0AHistorically,%20midterms%20have%20turned%20markets%20around...%0D%0A%0D [Email Share](mailto:?subject=A%20great%20piece%20from%20Liberty%20Through%20Wealth...&body=From%20Liberty%20Through%20Wealth:%0D%0A%0D%0AHistorically,%20midterms%20have%20turned%20markets%20around...%0D%0A%0D MORE FROM LIBERTY THROUGH WEALTH [Wealthy Woman]( [What Exactly Do Millionaires Invest In?]( [Beat Inflation]( [How to Beat the Worst Inflation in 40 Years]( [Putin Get Out]( [How to Profit From "Putin's Folly"]( [Diversified Investments]( [The Case for the Best Investment on Earth]( SPONSORED [Gold headed to $3,000/oz.?]( After what feels like nearly a decade of disappointing returns, gold is about to enter a major bull market. 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