As markets head into a presidential election year, history can serve as a guide to what investors can expect. By the end of 2023, share prices will rise at full speed. All three major averages have posted five straight weeks of gains, while the S&P 500 has hit new annual highs. This means that the Dow Jones Industrial Average will increase by more than 8% in 2023. The S&P 500 is up more than 18%, while the tech-heavy Nasdaq Composite has gained 35% this year. But if history is any indication, investors should scale back their expectations for a repeat performance in 2024, when incumbent President Joe Biden runs for re-election. In fact, data from Stock Trader’s Almanac shows that election years are typically weaker than pre-election years. On average, stocks rise 10.4% in election years, while stocks rise 6% in election years. Still, this would represent another positive bounce for stocks, albeit a more moderate increase. Based on Monday’s closing price, a 6% increase would put the S&P 500 near the 4,843 level. This means the broader index would have reached a new all-time high next year on both an intraday and closing basis. Currently, the S&P 500’s intraday high is 4,818.62, while the record closing high is 4,796.56. “Investors should expect a good year because historically we have seen positive returns in first-time presidents’ presidential election year with a very high frequency of wins and an unusually high return,” said Sam Stovall, chief investment strategist at CFRA Research. The investment strategist added that investors should not anticipate the possibility that the Federal Reserve could cut interest rates during an election year, as the central bank has either raised or lowered interest rates in every election year since 1992, he said. Additionally, investors should pay particular attention to how markets perform during the period from July 31 to Oct. 31, Stovall said. In data from 1944, Stovall found that a rising stock market usually indicates re-election of the incumbent, while a falling market indicates a replacement.