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The UK Stock Market Almanac 2016: Seasonality analysis and studies of market anomalies to give you an edge in the year ahead by Stephen Eckett

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US presidential election years

On page 154 it can be seen how closely correlated the UK and US markets are. As a result, the most important predictable event affecting the UK market in 2016 will be the US presidential election.

The 14 charts below show the performance of the FTSE All-Share index over the 12 months of a US election year. For example, the first chart shows the January-December performance of the UK market in 1960, the year John Kennedy was elected President of the United States. The dashed line in each chart indicates the date of the election.

Since 1948, the UK market has risen 14 times out of 17 (82%) in US election years, with a rather extraordinary average annual return in those years of 32.7%. Generally, the UK market tends ...

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