Stocks Just Entered This 9-Month Winning Pattern

Summary

The presenter argues that U.S. stocks have historically performed especially well during a nine-month stretch from October of a presidential term’s second year through the end of June of its third year. They attribute the pattern to reduced political uncertainty after midterm elections and suggest that current investor fear could leave room for confidence and stock prices to recover.

The video emphasizes that historical patterns are not guarantees and is aimed at long-term investors, not day traders.

Presidential-cycle statistics

The presenter gives the following average U.S. stock-market returns by presidential year:

• Year 1: 9%
• Year 2: 1% — the weakest
• Year 3: 18% — the strongest
• Year 4: 11%

The proposed explanation is that administrations often pursue major policy changes during their first two years, creating uncertainty. Midterm elections may reduce presidential influence, while the third year is typically less politically active. Campaign promises bring uncertainty back in year four.

The nine-month window reportedly averaged 18%, compared with 7% outside the window, and was positive in each occurrence since 1950. The presenter also mentions downturns in 1931 and 1939, before the stated post-1950 record.

Market conditions and valuation

The presenter describes recent investor sentiment as being in fear, rather than greed, and argues that this could leave more potential for sentiment to improve.

A comparison of trailing P/E ratios for the 1,000 largest U.S. companies, grouped by sector, is said to show that all 11 sectors are below their peak P/E levels from the prior year:

• Basic materials: 36% below peak
• Consumer discretionary: 20% below peak
• Technology: 19% below its May level

The presenter’s broader point is that individual stocks may be more reasonably valued than headlines suggest.

Stocks discussed

Company Valuation and growth figures cited Presenter’s disclosure Meta (META) P/E around 25; expected annual earnings growth around 18%; PEG around 1.4. The presenter says it previously traded at a P/E of 20–21. Says they invest in Meta. Netflix (NFLX) P/E around 21; expected earnings growth around 20%; PEG slightly above 1. Says they do not invest in Netflix. Booking Holdings (BKNG) P/E around 22; expected earnings growth around 16%; PEG around 1.3. Says they do not invest in Booking Holdings.

The presenter describes a PEG below 1 as indicating undervaluation, 1–2 as fair value, and above 2 as increasingly expensive, assuming projected earnings growth materializes.

Investing approach and cautions

• Long-term investors can choose broad-market exposure through the S&P 500, Nasdaq-100, or another index fund and hold it.
• Stock pickers can assess individual-company valuations and expected earnings growth rather than relying on market-wide headlines.
• The video promotes filtering stocks for businesses likely to achieve strong future profit growth but does not provide a detailed screening formula.
• The presenter cautions that the historical pattern is not a guarantee and says the three named stocks are examples, not purchase recommendations.
• The presenter discloses investing in Meta and says they do not own Netflix or Booking Holdings.
• No explicit “not financial advice” statement appears in the subtitles.

Sources and presenter

The presenter is not identified by name; the video is from Investor52. The presidential-cycle pattern is attributed to Ken Fisher, who is said to call the nine-month stretch the “midterm miracle.”

The presenter also promotes free, weekly-updated stock-screening lists at HelloStock.ai.