The year was 1992, the incumbent president was favored to win.
The stock market had been rallying during the 4th quarter of the previous year, until it peaked on January 15. Optimism started to fade. The president’s popularity was declining and previous statements he’d made were now coming back to haunt him. The Media promoted the challenging candidate’s claim that the country was experiencing the “worst economy in 50 years.”
Panic set in and the S&P 500 dropped to a low in mid-April. It then quickly recovered, forming a “V” pattern and rallied into June. Again, panic set in, the “V” pattern morphed into a “W” as the market dropped to nearly test the previous low. But the panic was short lived, the market again rallied, this time setting a new high, although things remained choppy until the election.
On November 3, the president lost, becoming only the 9th incumbent to lose reelection. The market reacted negatively for a couple weeks.
Over the course of the next 8 years, the market remained turbulent, sometimes impulsively volatile. But as the economy adapted to the seismic megatrends and shifts in demographics, society, and technology…the stock market ultimately rallied to become one of the greatest bull markets in history.
Bookmark this page and re-read it over the coming months and years.