Midterm Election Rally — Pattern
The strongest repeating pattern in the election cycle
Since 1946, the S&P 500 has rallied an average of approximately 32% from the midterm election year low to the subsequent pre-election year high. No negative 12-month post-midterm returns in that entire span.
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
This is the single strongest repeating calendar pattern in US equity markets.
The pattern has survived recessions, wars, oil shocks, and financial crises.
Midterm-year pullbacks are historically the best rebalancing opportunity in the 4-year cycle.
If any political calendar effect merits a place in your process, it is this one — midterm-year weakness has historically preceded strong twelve-month stretches. A practical application is scheduling your regular rebalancing review into midterm-year pullbacks, capturing the tendency without betting the portfolio on it.