RT Journal Article
SR Electronic
T1 Does the Market’s Vote Count? The Informational
Content of Post-Presidential Election Returns
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 55
OP 64
DO 10.3905/jwm.2014.16.4.055
VO 16
IS 4
A1 Ray R. Sturm
YR 2014
UL https://pm-research.com/content/16/4/55.abstract
AB One of the most important news events for the U.S. stock markets is certainly the election of the President. This study seeks to determine whether market reactions to elections are a valuable source of information for investors. Using data for the years 1896–2001, a momentum effect appears during the remainder of the election year, a slight reversal effect appears across the president’s term, and a strong reversal effect appears during the President’s second year in office. The difference in campaign information during the election and actual subsequent economic policy implementations may explain why the market’s vote does count.TOPICS: Security analysis and valuation, analysis of individual factors/risk premia, performance measurement