Post election year market returns

I just got the chart of the day email which shows the average post election year stock market return since 1900 pictured below.

“Today's chart illustrates how the stock market has performed during the average post-election year. Since 1900, the stock market has tended to underperform from early January to late February and again from early August to early November during the average post-election year. Some parts of the year have, on average, outperformed. The most notable period of out performance has occurred from late March to late May. In the end, however, the stock market has tended to underperform during the entirety of the post-election year. One theory to support this behavior is that the party in power will tend to make the more difficult economic decisions in the early years of a presidential cycle and then do everything within its power to stimulate the economy during the latter years in order to increase the odds of re-election.”

For a more granular look at the returns I referenced the Stock traders almanac and found that the market typically underperforms the first 2 years of a term because as much policy as possible gets pushed through. The pre election year or 3rd year in a term has typically been the best performing year as presidents and their parties stimulate the economy and prime the pump to hold onto power. Historically since 1953 the average Dow Jones performance during the 1st year of a term ( post election year) has been 2.7% per year as a comparison the average annual return of all years since 1953 has been 8.4% return per year. A break down by party shows that of the 9 republicans that have been elected since 1953 the 1st year of the term has been a loss of -1.2% annually, of the 5 Democrats that have been elected since 1953 the 1st year of the term has been 9.7% annually.