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The election year cycle…

With the market brainwashed into the belief that it is the best time to buy stocks because it is an election year, it is worth taking a deeper look at that empirical study. Considering the clear economic nature of the upcoming US elections, implied volatility could indeed increase on most financial assets. Looking back to historic data, it looks like volatility tends to fall in August and peak in October into a November election, only to fall once again from two weeks before to one week after the election. Will the pattern be confirmed again this year? We will find out in a couple of months…
Dafni Serdari
Market Analyst

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