Profit even with shitty presidential candidates

The executive branch of government can influence fiscal policy—changes in taxation and spending patterns. Administrations have often yielded to the temptation to exercise fiscal policy in a manner designed to pump up the economy just prior to a presidential election and thus garne voter approval for the incumbent party. These pre-election actions and campaign promises often have created some euphoria among voters and investors alike.

On the other hand, post-election periods seem to have suffered from an opposite effect that has resulted in less investor optimism. In The Stock Trader’s Almanac, 2004, Yale Hirsch notes that based on his studies, “Presidential elections every four years have a profound impact on the economy and the stock market. Wars, recessions and bear markets tend to start or occur in the first half of the term and bull markets, in the latter half.”

A potentially lucrative investment strategy would include buying on October 1 of the second year of the presidential election term and selling out on December 31 of year four. This simple strategy would have sidestepped practically all down markets for the last 60 years. For the most part, bear markets have historically occurred during the first or second years of presidential terms. 

Markets are also subject to change from time to time because of unforeseen macro events. As a result, some cycles have been shorter and some longer than the norm. Fundamental economic conditions and the role of the Federal Reserve are factors.

Another analysis shows a highly intriguing re-occurrence in the stock market index. During the entire twentieth century, every mid-decade year that ended in a “5” (1905, 1915, 1925, etc.) was profitable! This is not to say that all of these years had uninterrupted ascending trends, but by year’s end there had been impressive gains. Whether that pattern was a fluke or will continue is anyone’s guess. 

Summarized from: 

https://gbr.pepperdine.edu/2010/08/presidential-elections-and-stock-market-cycles/