Betting on Stability: Utilizing Historical Patterns to Leverage High-Cap Securities
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Authors
Cravens, Harris
Mott, Jackson
Nischwitz, Gray
Issue Date
2025-04-25
Type
Other
Language
en_US
Keywords
Scholarship Sewanee 2025 , University of the South, Administration Change, Historical Market Trends, Presidential Transition Timing, High-Cap Securities, Individual Sector Performance
Alternative Title
Abstract
This study examines the development and performance of an investment portfolio designed to capitalize on historical market trends following U.S. presidential transitions. By analyzing financial data from the first months of President Trump’s initial term (January–April 2017), this approach aimed to identify stable, high-cap securities capable of managing volatility and surpassing the S&P 500 during the corresponding time frame in 2025. The selected assets: Meta Platforms, Apple, Nvidia, Microsoft, and Amazon, were chosen based on sector performance, market dominance, and financial strength. Portfolio construction leveraged methodologies including Modern Portfolio Theory (MPT), the Capital Asset Pricing Model (CAPM), and comparative risk-return analysis.
Findings revealed that, while the portfolio maintained a strong strategic foundation, it did not achieve its objective of outperforming the S&P 500. Factors contributing to this outcome included evolving macroeconomic conditions, shifts in monetary policies, and regulatory changes, all of which diverged from the market environment of 2017. Additionally, broader structural market transformations, such as increased corporate concentration, AI-driven market speculation, and fluctuations in global trade, introduced new variables that affected investment outcomes.
Despite the results, this study highlights the significance of flexible investment strategies that incorporate historical context alongside contemporary financial trends. The insights presented here contribute to a deeper understanding of stock market behavior during political shifts, providing a foundation for refining future investment strategies. Future research may focus on incorporating real-time economic indicators and behavioral finance perspectives to improve predictive modeling and investment decision-making.
Description
Citation
Publisher
University of the South