Unlock Your Election Investing Edge

The markets are following this pattern to a T. [Total Wealth] BROUGHT TO YOU BY MANWARD PRESS Unlock Your Election Investing Edge [Robert Ross] Robert Ross Speculative Assets Specialist It's impossible to escape politics in the U.S. these days. Whether it's the ongoing concerns about U.S. government debt, former President Trump's legal battles, or Kamala Harris' proposed plan to tax unrealized gains, the political noise seems endless. That's why I usually avoid politics in these letters. While I have my own political views, I set them aside when making investment decisions. But there are times when politics and markets intersect. One of those times is during presidential election cycles, where the influence on the stock market is more pronounced, like the "market seasonality" [we discussed last week](. And as we approach the 2024 election, this intersection becomes more and more relevant. SPONSORED [The David to Nvidia's Goliath: Tiny Startup Solving AI's Biggest Challenge]( [CPU concept]( While Nvidia grabs the headlines, a little-known company is quietly reshaping the AI landscape. Their cutting-edge technology is tackling the biggest bottleneck in AI adoption, attracting customers like Intel, AMD, Microsoft, and more. As the AI boom accelerates, this tiny startup could be the ultimate winner. [Get in early on the AI revolution's best-kept secret.]( Clear as Day Stocks have been on a great run in 2024. Optimism over the Federal Reserve cutting interest rates, strong earnings growth, and the absence of a U.S. recession have catapulted the S&P 500 to all-time highs. But there's been one other tailwind for the market this year: the Presidential Election Cycle Theory. If you're unfamiliar, this theory suggests there's a certain rhythm to how the stock market performs during the four-year U.S. presidential election cycle. Economist Yale Hirsch developed the idea. He tested it by analyzing historical market data and presidential election cycles over 120 years. Here's what he discovered... The first year after an election tends to be a bit sluggish for the stock market. The new president is settling in and getting plans in motion. On average, the S&P 500 has delivered modest gains in the range of 5% to 6% during this year. But things tend to improve in year two with midterm elections. This is when the president and their party try to boost the economy to improve their chances in the upcoming midterms. The market tends to respond positively, with average gains of 7% to 8%. We tend to pick up momentum in year three, or the year before the next election. This is when the stock market tends to really shine, as the president and their party are eager to show strong economic results before the next election. They push policies that could potentially give the market a boost, which is why year three has seen some of the strongest gains with average returns of about 15%. SPONSORED [The Final Piece of Nvidia's AI Puzzle]( [Missing piece of jigsaw puzzle]( Nvidia's Blackwell chip is set to redefine artificial intelligence, but it can't reach its full potential without one crucial component. That's where this secretive startup comes in. Their technology is the backbone of Blackwell's success, and as Nvidia aims for global AI dominance, this little-known company could be the key to unlocking untold riches. [Discover the hidden link in the AI supply chain.]( However, things get a bit uncertain in an election year. The market might experience some ups and downs as investors worry about potential changes in leadership and policies. Yet despite the jitters, election years have still seen moderate gains on average, usually around 6% to 7%. As you know, 2024 falls on year four of the presidential election cycle. [Historical Presidential Cycle Pattern]( [View larger image]( And so far, the S&P 500 is following the historical trend to a T. The election year is one of the most profitable parts in the Presidential Election Cycle Theory... with the stock market experiencing its second strongest gain. [Four-Year Presidential Cycle: Average Annual Stock Market Gains]( [View larger image]( In an election year, the incumbent president and their administration are highly motivated to implement policies that stimulate the economy and boost the stock market. This is because they are keenly aware that the upcoming election will be a referendum on their economic performance. The goal is to create a favorable economic environment that can be leveraged during the campaign to gain voter support. This election cycle, we've seen significant legislative efforts aimed at economic stimulus, such as the Inflation Reduction Act and the CHIPS Act (2022), as well as attempts to address financial burdens, like the Biden administration's effort to cancel $20,000 in student loan debt (2024). These actions have been strategically timed to ensure that the economy is in a strong position as voters head to the polls. These stimulus measures often put more money in the pockets of people and businesses... which translates to higher earnings for many publicly traded companies. And since earnings are the main driver of stock market gains, it's why we often see stocks perform well after those efforts. But if history is any guide… Stocks are likely to keep rallying. SPONSORED [Nvidia's Secret Partner... This Is The New AI Chip Powerhouse]( [Chatbot conversation]( I bet you've never heard of it... but this newly public company is set to become key to Nvidia's seat on the AI throne. And for now... you can get in while it's still cheap. [Details Here!]( Comeback As both Shah and I have written about, September is historically the worst month for the S&P 500. However, I expect any pullback to be short-lived as the S&P 500 typically rallies into the presidential election and afterward... [S&P 500 Election Cycle vs Current S&P 500]( [View larger image]( For those investors with a long-term time horizon, this can be a great period to add to your long-term positions. As we've talked about multiple times, the way to make money in the stock market is to buy quality businesses and hold their shares for many years. That's exactly what we're doing in Breakout Fortunes, where we have a portfolio of quality small cap names. In fact, we took a 100% partial gain on one position a few weeks ago. Keep in mind the presidential election cycle is typically a good thing for stocks. So don't get shaken out of your positions. Stay safe out there, Robert Want more content like this? [YES]( [NO]( Robert Ross Robert Ross' unique style of clear and direct stock analysis has helped him build a massive following in the investment research industry. He started his career at investment research company Mauldin Economics, where he quickly rose through the ranks to become one of the youngest chief analysts in the industry. Today, over a million investors turn to Robert every month for his take on investing, economics and personal finance. He now shares his unique insights in Total Wealth and Manward Money Report. You are receiving this email because you subscribed to Total Wealth. To unsubscribe from Total Wealth, [click here](. Need help with your account? [Click here](. Have a question or comment for the editor? [Click here](mailto:mailbag@manwardpress.com). Please do not reply to this email as it goes to an unmonitored inbox. 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