Theory
The four-year U.S. presidential cycle is attributed to politics and its impact on America's economic policies and market sentiment. Either or both of these factors could be the cause for the stock market's statistically improved performance during most of the third and fourth years of a president's four-year term.
The month-end seasonality cycle is attributed to the automatic purchases associated with retirement accounts.
The secular stock market cycles that last about 30 years move in lockstep with corresponding secular economic, social, and political cycles in the US.
Read more about this topic: Stock Market Cycles
Famous quotes containing the word theory:
“The things that will destroy America are prosperity-at-any- price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.”
—Theodore Roosevelt (1858–1919)
“Won’t this whole instinct matter bear revision?
Won’t almost any theory bear revision?
To err is human, not to, animal.”
—Robert Frost (1874–1963)
“A theory of the middle class: that it is not to be determined by its financial situation but rather by its relation to government. That is, one could shade down from an actual ruling or governing class to a class hopelessly out of relation to government, thinking of gov’t as beyond its control, of itself as wholly controlled by gov’t. Somewhere in between and in gradations is the group that has the sense that gov’t exists for it, and shapes its consciousness accordingly.”
—Lionel Trilling (1905–1975)