US Presidential cycle

Over the last 19 US presidential election cycles, stocks have suffered losses just twice in the 12 months leading to election day, delivering an average return of 8%.

The theory behind the US presidential cycle is that stock market performance follows a pattern.

In the year 1 and 2 of a presidential election term, the president exits campaign mode and works hard to fullfill campaign promises before the next election begins. For this reason, the 1st year is typically the weakest of the presidential term and the 2nd year is not much stronger than the first.

In the years 3 and 4 of the presidential term, the president re-enter campaign mode and works hard to strength the economy. For this reason, the 3rd is typically the strongest of the 4 and the 4th year is the 2nd strongest.

We are currently at the 4th year of the US presidential term. Based on past statistics, equity market has a high possibility to perform well this year.

However we can still expect volatility as equity market has done exceptionally well in 2019. We prefer to buy into quality stocks and ETFs via fixed coupon note. So that clients can earn high yield while waiting to buy quality stocks and ETFs at lower price.


Below are list of stocks that we want to buy into clients' portfolio via fixed coupon note.

They are companies with robust fundamentals, growth prospects and economic moats.

Alibaba
Adobe
AIA
Alphabet Class A
Airbus
Ascendas REIT
Berkshire Hathaway Class B
Cisco
China Construction Bank
DBS Bank
Disney
Facebook
Frasers Logistic & Industrial Trust
JP Morgan
Industrial & Commercial Bank of China
Lockheed Martin
General Dynamics
Ping An Insurance
Mapletree Commercial Trust
Mastercard
Microsoft
OCBC
Tencent
TSMC (Taiwan Semiconductor)
Visa
SPY: S&P500 ETF
SPYG: S&P500 Growth ETF
QQQ: Nasdaq ETF
2822HK: China A50 ETF