Popula published a piece back in October before the mid-terms: One weird trick for making $$ in the markets after the midterms. The trick is a simple one: In every mid-term since 1950, if you had bought the S&P 500 the day before the elections and waited for 124 trading days, you would have had a positive return.
Surprise! It happened again:
Midterm Election Rallies 1950 - 2018
It would have been a rough ride. It looked at first as if the 64-year streak from 1950 to 2014 was going to come to an end at last. The biggest point of buyer’s remorse would have come on Christmas Eve, by which time you would have been down 14%. Out of all the 18 mid-terms since 1950, it would have been the most painful in terms bitten fingernails – almost as bad as the 12% plunge during the Nixon-Watergate midterms in 1974.
Lo and behold, however: If you had kept the faith and held on to the bitter end, you would have made 7.6%.
Alas, this quote from our October 29th piece:
“I, for one, am much too scared by the high valuation of the market and the imminent apocalypse to take the plunge this time, unless there is a substantial drop in the market between now and November 5th.”
Maybe next time.