Market Correction

Election time, how do you think it would be related to market ups and down?
Being a new investor this never did hit my mind that elections can also have an impact on market.
This phase is called “Market Correction” as many of my friends in stock market use.
There is a great impact of election on market which is in 2 phase. Just like election which starts with voting , there is a pre election phase in market wherein you would see a rise in market. There is also a post election phase where in you could see a change in market which depends on the stability of the government.
If you would have analysed the market now its has been rising, which started just before the election and would carry on till the date of counting. During election readers of newspaper goes up and so does the news chaneel. Sales of alcoholic beverages go up during election, with increse in money supply in market, people care product also gets benefited. Auto sales also rise up with use of SUVs during election campaigns, all these things directly affect the market. Post election there had been always a rise in market which is expectation on ploicy initiative. To be precise 16th May to 18th may would be the time when there would be a fall in market which is the correction time for market.
At the end let me provide you with some data that would provide some support to my blog:
· For the last eight elections from 1980 onwards sensex on an average showed 4% gain in the three months preceding elections. Barring the May 2004 elections, sensex has, in fact, gained more than 5% in the three months preceding the elections the last five times since 1980.
· The benchmark index was up 13.5% before the October 1999 polls, 5.1% before the March 1998 polls, 5.9% in 1996 and 8.1% in 1991.
· In 2004 (after five years of the NDA government) and 1980 (following the Janata Party's short-lived rule), sensex recorded less than 1% returns in the three-month period before the polls, but mind you, it still made gains.
· In 2009 index has already risen upto 5%.