3rd Year Presidential Cycle S&P 500 Returns

Bush 2003: 28.7%
Clinton 1999: 21 %
Clinton 1995: 37.5%
Bush 1991: 30.6%
Reagan 1987: 5.2%
Reagan 1983: 22.5%
Carter 1979: 18.4%
Nixon/Ford 1975: 37.2%
Nixon 1971: 14.3%
Johnson 1967: 24 %
Kennedy/Johnson 1963: 22.8%
Eisenhower 1959: 12 %
Eisenhower 1955: 31.6%
Truman 1951: 24%
FDR/Truman 1947: 5.7%
FDR 1943: 25.9%
FDR 1939: (-0.4%)
FDR 1935: 47.7%
Hoover 1931: (-43.3%)
Coolidge 1927: 37.5%

Average return 20.1%
Median return 23.4%
Positive 3rd yrs 18
Negative 3rd years 2

I suspect we'll see 20%+ returns in 2007 with most of the gains coming in the first and fourth quarters when liquidity is strongest. Recession fears are vastly overblown by most investors and pundits. We shouldn't have to worry about recession until about 2010. This is a mid-cycle slowdown which is an excellent environment for stocks. Enjoy the ride!