Hello Again -
As many of you are aware, Berger Financial Group and Michael Traxler Wealth Management LLC are now fully aligned and working together. This business combination is going extremely well, and already almost all of our clients have verified in just the first 2 1/2 weeks.
So let’s get on with business. What is our outlook for the end of the year?
One pattern is sometimes referred to as the“September Effect”. This refers to a historical tendency for stocks to be soft in September, and in fact, we have seen some weakness the last few days. The typical pattern is to go down, or trade sideways, through Sept and into Oct before turning up again. This pattern is not perfect. I have seen it bottom in August, Sept, Oct, or Nov, but generally speaking, it does seem to act this way at some point during the fall season.
The other part of this pattern is this: eventually the stock market bottoms in the fall and starts to go up again into the end of the year. This rally is referred to as the“Santa Clause Rally”. Does it happen this way all the time? Of course not, it’s just a guide.
Finally, and here’s the one I want you to pay particular attention to: it’s called the“Third year of the Presidential Cycle”. The 3rd year of the four-year presidential cycle tends to have abnormally high returns when compared to the other years, like almost double on average. Now, guess what next year is? That’s right, 2027 will be the third year of the current presidential term.
To summarize:Stock market outlooks are notorious for being wrong, and mine are no exception, so take them with a grain of salt. Simply based on average historical trends, we would expect a dip sometime this fall, and when that’s done, a rally into the end of the year. We also expect 2027 to potentially be a very good year. That’s our outlook at this time, and remember, anything can happen, so let’s sit tight and see how things play out from here.
Best regards,
Mike & Team