Money: The Election Effect?

History says that stocks tend to rally as elections near. But don't bet on it

If Wall Street has a Holy Grail, it's that long-sought predictor of future success. This election year is no different. In recent weeks, I've heard several investment strategists declare that stocks are sure to rise in the latter half of a Bush second term. But there's no reason to believe they will be right. Welcome to a forecasting folly called "the presidential cycle." In theory, it makes sense. As CEO of the U.S., the President can tighten the nation's belt in the first year or two of his term, then bust the budget in years three and four. That pattern would...

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