The S&P 500 plunged over 1% Wednesday as President Trump prepared to announce new auto tariffs, continuing a volatile month that has investors questioning the market's direction. Amid this uncertainty, a remarkable prediction from a 50-year Wall Street veteran is gaining attention – one that suggests today's market worries are misplaced, and that an extraordinary buying opportunity exists right now, despite a major crash looming in 2026.
The "Election Cycle" Pattern Most Investors Have Never Heard Of
This market forecast isn't based on economic indicators, inflation fears, or even Trump's policy decisions. Instead, it relies on a little-known but historically accurate pattern called the "Election Cycle" – a phenomenon researched by major institutions including Charles Schwab, Goldman Sachs, and T. Rowe Price. The cycle reveals that Year One of any presidential term (where we are now in 2025) has historically produced average gains of 21%, with stocks rising 90% of the time regardless of which party holds the White House. This consistent pattern has correctly anticipated market movements for over a century, yet remains virtually unknown to most retail investors.
Why 2026 Could See a Market Collapse – And Why That's Important Now
According to the same Election Cycle data, Year Two of presidential terms (2026 in our current cycle) has shown the highest probability of a market crash, with the S&P 500 experiencing a bear market in 9 of the last 14 presidential cycles. Historical patterns suggest this downturn is most likely to begin around March 16, 2026, with markets typically bottoming in October. Understanding this timeline is crucial for investors because it creates a clear window of opportunity to capitalize on potential 2025 gains before positioning defensively ahead of next year's anticipated decline.