Stock Market Performance: A Surprisingly Accurate Presidential Election Predictor

The S&P 500`s performance in the three months leading up to a presidential election has historically been an indicator of the election`s outcome. Since 1928, a positive S&P 500 performance during this period has been associated with the incumbent party winning in 80% of cases. Conversely, a negative S&P 500 performance has been associated with the incumbent party losing in 89% of cases. This method has an 83% accuracy rate, correctly predicting 20 of the last 24 elections. However, it is not foolproof, as demonstrated in the 2020 election where the S&P 500 was positive, but the incumbent party still lost.