Election Cycle
The four-year US presidential cycle and the average return profile of each year — a slow, structural seasonality layer.
You are here
Year 2 · Midterm
43% through the presidential term
94d to the midterm elections (Nov 3 2026)
Year 2 — the washout and the gift
The weakest average year of the cycle, the deepest average drawdown (~17%), and — because of exactly that — the single best entry window the cycle offers: the midterm-year low.
- ▸Budget for chop: size positions expecting an outsized intra-year drawdown, typically bottoming in the Aug-Oct window
- ▸Build the shopping list now — the 12 months following midterm-year lows have been positive every time since 1950, averaging ~+32%
- ▸The Q4(midterm) → Q2(pre-election) stretch is historically the strongest 9 months of the entire 4-year cycle — that's the window to be fully invested for
Caution: Don't front-run the low with full size. The pattern pays those who keep powder dry into the autumn, not those who buy every spring dip.
S&P 500 by cycle year
measured on this feed since 1998 · canonical record 1950-2023
Year 1 · Post-election
Year 2 · Midtermnow
…but with the deepest average intra-year drawdown of the cycle (~17%), and the strongest 12 months in the cycle measured from the midterm-year low (avg ~+32%, positive every time since 1950).
Year 3 · Pre-election
The strongest year of the cycle by a wide margin — no losing pre-election year between 1943 and 2015.
Year 4 · Election
The average midterm year vs 2026
■ avg of 7 past midterm years■ this year · indexed to 100 at Jan 1
The gold line is the average shape of a midterm year on this feed — note the classic pattern: choppy first half, weakness into late summer / autumn, then the year-end recovery that launches the cycle’s strongest stretch. The blue line is this year so far, plotted on the same scale.
Avg S&P return by quarter × cycle year
the Q4-midterm → Q2-pre-election sweet spot, visible
| Cycle year | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| Year 1 · Post-election | -1.4% | +6.5% | +2.8% | +6.6% |
| Year 2 · Midtermnow | +2.5% | -4.8% | -1.4% | +6.1% |
| Year 3 · Pre-election | +3.9% | +5.6% | -3.8% | +8.5% |
| Year 4 · Election | -0.5% | +2.5% | +1.5% | -0.8% |
Asset classes by cycle year
best now: Gold·worst now: Long bonds
| Post-election | Midterm | Pre-election | Election | |
|---|---|---|---|---|
| S&P 500 | +15.1% | +2.2% | +14.5% | +3.3% |
| Small caps | +15% | -1.5% | +11.8% | +7.4% |
| Gold★ | +13.2% | +9.7% | +15.1% | +14.1% |
| Long bonds | -6.1% | -2.5% | +6.2% | +5.9% |
| Bitcoin | +474.1% | — | +94% | +182.7% |
| US dollar | +0.3% | +0.1% | -0.9% | +1.5% |
Annual returns grouped by cycle year. Bitcoin has lived through barely two full cycles — its cells are colour, not evidence. Hover any cell for hit rate and sample size.
S&P sectors by cycle year
best now: Energy·worst now: Technology
| Post-election | Midterm | Pre-election | Election | |
|---|---|---|---|---|
| Technology | +19.7% | -5.5% | +32.1% | +1.2% |
| Financials | +15.3% | -0.6% | +3.6% | +6.6% |
| Energy★ | +15.6% | +7.7% | +7.5% | +1.1% |
| Health care | +16.7% | +5% | +10.2% | -1.9% |
| Industrials | +15% | -0.4% | +13.6% | +5.1% |
| Staples | +6.7% | +0% | +5.7% | +5.6% |
| Utilities | +6.9% | +1.6% | +6.9% | +4.5% |
| Discretionary | +19.7% | -0.8% | +16.9% | +5.7% |
| Materials | +17.8% | -0.3% | +12% | -1.5% |
Sector ETF annual returns since 1999. Read the highlighted column for the current cycle year: the leaders there are the historical tilt, then confirm with the live Business Cycle sector tilts before acting. Hover any cell for hit rate and sample size.
The 60-second version
US markets have historically rhymed with the four-year presidential term: policy is front-loaded with pain after elections, mid-term years grind and wash out, and incumbents stimulate into year three — the strongest year of the pattern by a wide margin. This page measures all of it two ways at once: live-computed from this feed’s price history (every table shows its sample size), and beside the canonical published record going back to 1950, so you always see both the fresh measurement and the long base rate.
What each panel answers
- You are here + playbook — the current cycle year, days to the next vote, and the concrete positioning guidance for this exact phase — including the midterm year's defining trade: budget for the washout, then be fully invested for the Q4→Q2 sweet spot.
- Cycle-year returns — average S&P return and hit rate for all four years, live vs 1950-2023. The headline facts: year 3 averages ~+17% with ~90% hit rate; year 2 is the weakest but its LOW has launched a ~+32% twelve-month run every time since 1950.
- The midterm path — the average intra-year shape of past midterm years overlaid with this year's actual path — is this year tracking the script or breaking it?
- Quarter × cycle heatmap — where in the calendar each cycle year's returns actually live. The green diagonal from Q4-midterm through Q2-pre-election is the single strongest 9-month stretch of the whole pattern.
- Asset & sector matrices — annual returns for six asset classes and nine S&P sectors grouped by cycle year, with the current column highlighted and best/worst callouts — the historical answer to 'what do I overweight in a year like this'.
Honesty about sample sizes
The live-computed tables run on roughly seven complete cycles (this feed’s history starts in the late 1990s) — enough to see the pattern, not enough to treat any cell as law. That is why every number carries its n and hit rate on hover, why the canonical 1950-2023 record is shown alongside, and why Bitcoin’s cycle cells are explicitly labelled colour rather than evidence. The pattern also has famous exceptions: 2001-02 (post-election crash years), 2008 (election-year collapse), 2015 (flat pre-election year) — always cross-check the Business Cycle tool before leaning on the calendar.
In the MTS framework
The election cycle is a long-horizon Space layer — a slow seasonality measured in years. It earns weight in confluence: a midterm-year autumn low arriving while Credit Spreads are widening-then-turning, liquidity’s impulse is bottoming and the Business Cycle sits late is the textbook generational entry the pattern keeps producing. The calendar alone is never the trade; the calendar plus the other pillars agreeing is.