Welcome to Rivers Investment Group, the paraclete of wealth management.
I’m Danny Rivers, also known as Papa Bear, and today I want to give you three things that I’m seeing in the stock market right now—and how that might affect you.
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The three things I see happening in the stock market right now:
1. September’s Market Trends
September has historically been a very difficult time for the stock market. Now, granted, this September is worse than normal, but it’s normal for the stock market to have a hard time in the month of September. Sometimes that even bleeds over into the first week or two of October. After that, it’s perfectly normal for the stock market to begin mounting some sort of rally that carries through November, December, and even into January. Seasonally, that’s the strongest period of time for the markets.
Of course, past performance is no guarantee of future results, but we certainly have hope that this trend will continue here in 2022 and into 2023.
2. Midterm Election Effects
The stock market has also had a hard time as it approaches a midterm election. After those midterm elections are resolved, the markets tend to do better—not as well before a midterm election, and sometimes the recovery even begins a week or two before the election.
I don’t think the market actually cares which team wins in November; I believe the market is just happy that it’s all been resolved. In fact, our friends at Capital Group just put out a great educational piece that discusses the midterm election. I’ll be happy to email it to you—just send me your email address and I’ll make sure you get it.
3. The Presidential Election Cycle
If you take a look at the presidential election cycle—and this is something you can Google and look up yourself—you’ll find that, historically, the first two years of a president’s term are more difficult for the stock market, whereas years three and four tend to be a better period for the market. Again, we don’t know if that trend will continue, but so far it’s setting up to be that same kind of thing: the first couple of years of the president’s term are more difficult for the market, and hopefully, if that trend continues, years three and four will be better for the markets.
I hope this was helpful! Remember, you can send your questions to Ask Papa Bear at www.riversig.com or askpapabear@riversig.com.
