Markets (nearly) always fall after elections

Barack Obama (Democrat) was re-elected last night.  The Dow (^DJI) is down around 280 points (2.2%).  Does this mean that Obama is especially bad for stocks, or that Mitt Romney would have been better?

No.  Markets almost always fall after an election, regardless or who (or what party) wins.  George W. Bush (Republican) was elected on Tuesday, 7th November 2000.  The Dow closed at 10,952 that day.  At the end of the week it closed at 10,602, down 350 point or 3.2%.  The following Monday it hit a low of 10,369, down 583 points or 5.3% in just four trading days (see chart).  It took a full month to recapture the pre-election levels.

Conclusion: The dip is a buying opportunity.



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