Every major election year brings out the prognosticators who all claim to have the best model to predict the outcome of the presidential election. This year the researchers at LPL Research provided an interesting table illustrating that when the S&P 500 Index generates a positive return three months before a presidential election, the incumbent party wins the election the vast majority of the time. When the returns are negative, the challenger wins. Examining election cycles going back to 1928, this indicator has a success rate of 87%. How well will this indicator predict this crazy election? We will see….
