Methodology
| Item | Method |
|---|---|
| Main index | S&P 500 daily closing prices. |
| Data range | 1927-12-30 to 2021-01-29 from a public Yahoo-style CSV mirror; 2021-02-01 to 2026-06-12 from FRED SP500 CSV. |
| Event alignment | If the event date is not a trading day, the next trading day is used as the aligned market date. |
| Return windows | 1, 5, and 20 trading days before and after each event. Return = ending close / starting close - 1. |
Summary of the Tested Myths
| Myth / Cycle | Sample | Window | Average Return | Median Return | Win Rate | Interpretation |
|---|---|---|---|---|---|---|
| World Cup opening | 22 | 20 trading days after | -0.57% | -0.59% | 45.5% | Slightly negative, but the dispersion is too large to call it a reliable signal. |
| US midterm elections | 24 | 20 trading days after | +0.91% | +1.02% | 70.8% | Mildly positive and more consistent, likely reflecting uncertainty resolution. |
| Presidential cycle year 1 | 24 | Full calendar year | +5.5% | -0.95% | 58.3% | The least consistent year in the cycle. |
| Presidential cycle year 2 | 24 | Full calendar year | +6.9% | +1.68% | 62.5% | Mildly positive, but still noisy. |
| Presidential cycle year 3 | 23 | Full calendar year | +16.6% | +17.27% | 82.6% | The strongest historical pattern in this set. |
| Presidential cycle year 4 | 23 | Full calendar year | +7.8% | +8.99% | 78.3% | Generally positive, but bad election years still happen. |
| Summer Olympics opening | 23 | 20 trading days after | +2.70% | +0.68% | 60.9% | Positive on average, but dominated by outliers and not directionally stable. |
How to Read Each Pattern
World Cup Opening
The average post-opening performance is slightly negative, especially over the first few trading days. But the sample includes very different macro environments: recessions, wars, inflation cycles, valuation resets, and policy shifts. The World Cup itself is not a credible causal explanation.
US Midterm Elections
The post-midterm window is more consistently positive. A reasonable interpretation is that markets often respond to reduced uncertainty and clearer policy expectations after the election result, not to the election date as a mechanical market trigger.
Presidential Cycle
The third year of the cycle has historically been the strongest. Even so, the pattern is descriptive, not guaranteed. Macro conditions, valuation, earnings, interest rates, and recessions can easily dominate the cycle.
Olympics Opening
Olympic windows show no stable directional effect. Large positive and negative cases alternate, which makes the average less useful as a decision rule.
Important Limitations
- These are descriptive event-study results, not trading signals.
- The windows do not control for interest rates, valuations, earnings cycles, inflation, recessions, or geopolitical shocks.
- Small samples are fragile. A few extreme years can change the average meaningfully.
- When a pattern sounds simple, the burden of proof should be higher, not lower.