Why does the market soften during an election year?

Question

I understand that there is a higher degree of uncertainty but that can't be the ONLY reason. New fiscal policies take years to implement and show any signs of impact. So other than market uncertainty, what are some reasons that the market softens during election year?

Answer 1

Generally, stocks do well in election years:

"The S&P 500 has gained in every pre-election year since 1939, except for one, when it was flat."

Answer 2

How do you define softening and what market are you referring to? The stock market? There are many other factors that may coincide with an election year. Even though historically a softening of the market occurs at this time, there may have been other contributing factors that just happened to play a role although they were technically unrelated. There just happens to be an energy crisis at the moment, but there have been other energy crises before which may have come to a head during an election year because everybody expected the new president to do something about it. Similarly with other economic factors.

Answer 3

I've not seen anything "soften", define that please...