Stock market crash 1987 effects

There is a four-year presidential stock cycle, a year stock market cycle, and a seven-year stock crash cycle. With the Republican convention taking place this week and the Democratic convention next week, it's time to start thinking about the impact of politics on investing markets.

Stock prices are strongly affected by fiscal and monetary policy both directly and indirectly though the economy. Since politicians want the economy and the stock market to be doing well in election years, it shouldn't be surprising that there's a four year U. This is only one of several stock market cycles, however, and it needs to be considered how the various cycles overlap each other.

There also appears to be a decennial cycle where years ending in certain numbers see strong stock prices and other years see weak ones Market observers have also noted a seven year crash cycle. The weakest parts of at least one of these cycles will be with us until early This figure is skewed, though, by the Credit Crisis collapse in the fall of While there is usually a rally in a presidential year, the market actually tends to go down in a race with no incumbent running, as is the case in If the cycle follows its historical patterns, stock prices will be weakest in the second half of and the first half of The final stock market outcome inhowever, depends very much on which candidate is elected.

The market is likely to react much more favorably to Hillary Clinton because of her mainstream views. Donald Trump, on the other hand, is seen as volatile and unpredictable. No one knows exactly what he would do as president. The stock market hates uncertainty and is likely to sell off if Trump wins the presidency in early November.

According to a theory of a year stock market cycle, seven is not a particularly lucky number for the stock market years ending in five have historically been the best ones and years ending in three are even worse. Inthe market was volatile in forex trade secret revealed summer, but didn't start turning down until October.

The real devastation didn't take place until Ten years earlier, inthe worst U.

Effects of the Stock Market Crash | Finance - Zacks

Crashes have their own patterns, though, independent of the decennial cycle. For the crash cycle, the fxcm trading indicators crash shouldn't be taken literally, but to indicate market weakness.

This certainly took place inwhen the worst bear market up to that time since the depression began. The market was also weak in when the first of two back to back recessions started.

10 lessons from the market crash of - MarketWatch

Then, saw a mega crash. Instocks were weak, but avoided a full-blown bear market. Instocks were in a major bear market that stock market crash 1987 effects ended in the fall of Inthe Credit Crisis took place and devastated stock prices.

The next major market incident was due in Although could be argued for, if you take the end dates of the previous drops. The market actually bottomed in The most positive year in the decennial cycle should have been though, so maybe the two cycle effects cancelled each other out. If the crash cycle is going to show up, it would probably have to do so by this fall at the latest.

Any number of incidents could make this happen. The world is in an unstable political period at the moment with three major surprises in the last month - the BREXIT vote in how to make money recycling plastic bottles UK, the terrorist incident in Nice, France and forex exchange rates iqd attempted coup in Turkey a NATO country that is trying to join the EU.

Additional incidents should be expected and quite possibly much worse ones and these can take place as early as this August.

Bull market nearing anniversary from - Business Insider

While those can't be timed exactly, what takes place in October before the presidential election can be. If the polls show a win for Trump to be likely polls are currently within the margin of errorthis will definitely affect stock prices negatively. If they are even somewhat close, he could still win.

All the last polls for the Brexit in the UK predicted it would fail, and they were all wrong. So, what should investors do?

This is no time for complacency. If they fall back below their breakout prices, then it should be assumed that the new rally attempt has failed. If the market starts to sputter as the fall begins, it will be a good idea to lighten up on stocks and consider shorting broad-based stock ETFs like SPYDIAQQQand IWM. I wrote this article myself, and it expresses my own opinions.

I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article. The Presidential Election And Stock Market Cycles Jul.

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New York Investing meetup. Summary There is a four-year presidential stock cycle, a year stock market cycle, and a seven-year stock crash cycle. One or more of these cycles will be in a weak period between now and early Cycle research indicates could be a down year, and could be worse.

Stock Performance During the Presidential Cycle. Macro ViewMarket Outlook. Want to share your opinion on this article? Disagree with this article? To report a factual error in this article, click here. Follow Daryl Montgomery and get email alerts.