"Presidential Cycle" helps investors.

• Position: Your Life

Pocketbook issues always have played a key role in deciding presidential elections, and, mindful of that reality, candidates for the nation's highest office spend enormous amounts of time, energy, and money during the campaign season trying to convince voters that they, as opposed to their rivals, possess the best ideas for creating economic prosperity. A study by H.S. Dent Publishing, Dallas, Tex., suggests, however, that wealth generation for equity investors may have less to do with which candidate is elected and much more to de with when investors move into and out of the equity markets during the succeeding "Presidential Cycle"--the four years that follow the election year.

The study reviewed the performance of the S&P 500 against the returns of a model equity portfolio from 1952 through 2003. The study's findings reveal a pattern of predictable performance during each year of each Presidential Cycle. As significant, the study confirms that investors may be able to position themselves to generate higher returns by relying upon the Presidential Cycle to move into and out of equity markets.

"Our findings confirm that Year 1, which represents the first year of a president's term in office, and Year 3 are periods of growth in the equity markets," says Rodney Johnson, president of H.S. Dent Publishing. "Year 4 is basically flat with a slight upward trend and Year 2 is traditionally a down year...