The four most dangerous words in investing are: ‘This time is different.’ — Sir John Templeton

A boy of about 8 years old raises his hand at a political event for President Obama, where he is attending a school to speak. The boy clears his throat as he attempts to shake the cobwebs of fear to speak out in front of all his friends in the gym, and asks the President in the light, confident voice of an 8-year-old “Mr. President, why did you make the stock market crash? I read it. It’s all your fault. I don’t see my parents anymore because of it, now they’re always working again. Dad says we’re not going to Disney Land this year, because we don’t have the money anymore. Why did you let this happen to us?”. To which the president replies: “This time it’s different…”

What the boy read is ‘Killing Wall Street’, which illustrates that history says: “This time is NOT different.” In the past 50 years, every full two-term presidency, without exception, has resulted in a stock market crisis in the last year and a half of the final term. This happens to be right around the time the presidential nominations for both parties begin their campaigns and paint a picture of political uncertainty and, once again, the world’s most powerful nation on the planet has an uncertain political future. Today, a crisis in the stock market is once again raising its head right in the midst of nominations for both the Republican and Democratic parties in the United States. Investors who would usually look to a predictable future of leadership in the United States are instead left looking through clouds of political chaos and uncertainty.

Killing Wall Street is not a doomsday piece, however the introduction may suggest it is. Killing Wall Street is instead, an explanation of a consistent trend in the financial markets which InsiderSense identified, and a trend that has held true for each of the double term presidencies in the past half century (it actually goes back to the Twenty-second Amendment; 1947). We will help you understand an underlying theme that has helped fan the flames of market depreciation, but perhaps more exciting has been the trend following the election, and how you can best position yourself to profit.

Killing Wall Street is for the little boy who has once again lost his family to the system as they try to rebuild what they have lost. Because knowledge is your best friend in financial crises, and although it may be too late to avoid, it isn’t too late to prepare for what history has shown us to come.

The 2 Term Presidential History of USA

A brief walk through two-term Presidencies in the United States

Since the Twenty-second Amendment to the United States Constitution in 1947 which limited presidential term length to 2 terns, there have been 4 presidents who have served the full 8 year term, with one currently serving the last year of his double term:

Republican — Dwight Eisenhower (1953–1961)

Republican — Ronald Reagan (1981–1989)

Democrat — Bill Clinton (1993–2001)

Republican — George W. Bush (2001–2009)

Democrat — Barack Obama (2009–2016)

*You may wonder why Richard Nixon is not on this list, although he was elected to a double term. Nixon was the only president to resign from office in the entire history of the United States, and he signed his resignation papers because of the Watergate scandal in the early 1970s, which was an abuse of power by the Nixon administration in an attempt to thwart activities by Democrats.

If you split the double terms into 2 parts, the first six and a half years and the last year and a half, you have a basis that compares a period of relative political stability to a period of relative political instability in the United States. Since the ratification of the Twenty-second Amendment, the S&P 500 has returned 129% (13% annual) in the first six and a half years, and lost 14% (10% annual) in the last year and a half of two-term presidencies. In other words, the first six and a half years of a two-term presidency returns 23% per year over the last year and a half of double term presidencies.

Ronald Reagan

January 20, 1981 - January 20,1989

“We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.” — Ronald Reagan

The presidency that came close to never being, with a failed assassination attempt 69 days into the Reagan presidency. Reagan is perhaps best known as a crusader against big government and regulation for his small government advocation and tailoring of policies to empower business. When Reagan began his presidency in 1981, the United States economy was the worst since the Great Depression of the 1930s. An entire new generation of workers, the “Baby Boom Generation”, was fighting to enter the workforce but was being stonewalled by the walls of crippling interest rates and stagflation (when inflation is high, but economic growth is low).

Reagan promised to restore prosperity by getting “the government off the back of the American people” by cutting taxes, slashing spending, and deregulating the economy. His economic policies were rewarded by a lasting and powerful economic boom, driven by the greatest bull market on Wall Street since the 1920s.