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Midterm Elections - What to Expect

False Promises.jpeg

Let me start this months blog with a slight digression on September… I understand that September has been incredibly volatile for you thus far, and I’ve no doubt there have been some losses along the way for some of you that don’t understand the movement of price, or have any kind of patience - which does sadden me… if you’ve traded the biggest bull market in history without success… you might want to get in touch and schedule a call with me.

To state the obvious, I written last months blog for a purpose, but as a Trader who understands risk, and as a Trader that understands when to get aggressive and when to be cautious, September was NOT the month to be aggressive… in fact… this year just hasn’t been the year for getting aggressive, we’ve required patience, we’ve required discipline, and we’ve required rules, if you don’t have any of those tools in your toolkit… essentially, what you’re trying to do, is hunt a fully grown male lion with nothing but a leg of ham… quite simply, you’re going to get mauled, because there’s a slightly stale smell of inevitability that accompanies ll-discipline, and losses are simply the by-product.

I trust lessons have been learned, and to those that navigated September successfully… congratulations. Hopefully Midterm Election year will be equally rewarding for you.

What I’m about to convey to you all, is certainly eye opening… and I must confess, it was not myself that broached the subject matter, but rather one of my 1 to 1 clients John who pointed me in the direction of this little nugget, and I’m sure you’ll find the facts just as interesting as I do.

October 31st, please do mark the date in the calendar because we can start planning for the next 12 months NOW… and the simple reason for this is the seasonal nature of Midterms. In the same way that September offers seasonal information, we can also gather information from the big events, and I’m happy to consider the favorable information that we’re presented with.

Since 1946, there have been 17 Midterm Election years, and in the 12 months that follow October 31st, the stock market has risen…. wait for it… 17 times.

Yes, you read that correctly, the market has risen on 17/17 occasions…. and wait for it again…. the market has risen on AVERAGE 17.5% during this time…. SEVENTEEN AND A HALF PERCENT…. let that register for a second, because it taken me a few minutes to fully grasp the implications of what I’ve just written down.

So what does that mean for all you trading wannabes and Investors?

The likelihood of a Market Crash is pretty low (although I do accept that it can most definitely happen), when we’re faced with the prospect of playing the odds, I kinda like the odds presented to us… 100% of the time, the market has risen during the given time period… hypothetically, if you boarded a flight to sample the cheap alcohol and the blackjack tables of Vegas, and there was a loudspeaker announcement telling you that for the next hour, you will win 75% of the hands that you play, you would beat a path down to the tables, remove every obstacle in your way, withdraw as much cash as you could and go hell for leather. This would be considered a logical approach.

It must be said though, by playing the stock market during this period, it certainly won’t present you with guaranteed success, because, if you’ve traded the current market and you haven’t turned a profit thus far… can the above information really have much of an impact upon you? It’s more than likely that you’ll need to change something… learn new tricks… learn how to integrate Technical Analysis… identify strong stocks… how to knit Technical’s together… how to build a Trading Plan and a Rule Set… these are all minimum requirements for a Technical Trader to be successful, and if you have anything less than this, please do re-consider your approach or consider chatting with me.

I for one will move forward with this knowledge and continue to crush it… as will those that I educate.

If you’re interested in education and you struggle with your trading results… we’d love to hear from you.

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Sam McCallumComment