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Wall Street’s pick for president?

By Judy Martel · Bankrate.com
Sunday, June 24, 2012
Posted: 7 pm ET

Want to know who the next president will be? According to investment firm InvestTech, you don't need to look any further for the answer than the Dow Jones Industrial Average.

The Montana firm claims the stock market has been the most reliable indicator of the presidential elections for 100 years. In fact, the market has been correct in forecasting nearly 90 percent of the 28 presidential elections since 1900. The three exceptions are 1956, 1968, and 2004.

"The election is a reaction to the stock market. If you see strength in the market, consumer sentiment and confidence among the voters is higher. If you see volatility, you are going to see investors take that out on the incumbent," Eric Vermulm, senior portfolio manager at InvestTech, told U.S. News and World Report.

Here's the key: If the stock market falls in the two months leading up to the election, the incumbent loses. If it rises, the challenger wins.

With all the volatility in the stock market this year, it still seems like the election is still too early to predict. Do you believe the stock market-election theory and, if so, do you think the Democrats or Republicans have cause for worry?

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4 Comments
haha
June 29, 2012 at 3:52 am

I'd have to agree with this correlation. August of 2008 Obama and Mccain were polling near even, Lehman Bro's collapses and it's all the over for the incumbent party. Same will be said for Obama if this summer-crash cycle continues that stocks have been experiencing for the last few years

Ray
June 25, 2012 at 3:20 pm

So Obama wins only if the stock market is flat, LOL!

Wisefool
June 25, 2012 at 7:33 am

Heads, I win... Tails, you lose.

Pmccabe
June 24, 2012 at 10:50 pm

"Here's the key: If the stock market falls in the two months leading up to the election, the incumbent loses. If it rises, the challenger wins."
Where can you get a good copy editor when you need one?