The U.S. Presidential election is set to take place in a little more than a year in November 2012. Despite recent gains, many technology stocks are still trading substantially below their July levels. Is this a good time to buy on the dip, or is it best to sit out current uncertainties? How have technology stocks performed historically during election years?
As many of today's leading technology stocks are relatively new, we examined the performance of the NASDAQ 100 index from October 1 of the year preceding the election to October 1 of the election year, for the past 40 years. Hence, we accumulated data for the past 10 U.S. Elections:
| Year | Elected President | NASDAQ Oct 1 -Oct 1 change |
| 2008 | B. Obama Democrat | -39.81% |
| 2004 | G.W.Bush Republican | +2.21% |
| 2000 | G.W. Bush Republican | +13.59% |
| 1996 | Bill Clinton Democrat | +17.9% |
| 1992 | Bill Clinton Democrat | +11.45% |
| 1988 | G.H.W. Bush Republican | +18.31% |
| 1984 | R. Reagan Republican | -10.03% |
| 1980 | R. Reagan Republican | +42.24% |
| 1976 | J. Carter Democrat | +17.35% |
| 1972 | R. Nixon Republican | +23.92% |
On average, the NASDAQ 100 gained about 9.71% during the past 10 elections, from October 1 of the year prior to the presidential election, to October 1 of the election year. There were 8 up-years and 2 down-years. The up-years averaged about +18.37%, while the two down years averaged -24.92%, being heavily influenced by the 2008 market drop of almost 40%.
Meanwhile, from Oct 1 1972 to Oct 1 2010, including non-election years, the NASDAQ 100 registered average 12-month gain of about 11.69%, with 30 up-years, and 8 down-years. Hence, although the NASDAQ 100 in general had positive performance during election years, such performance was not as robust as non-election years.
Many of today's leading technology stocks, such as Yahoo! (YHOO), Google (
