For 68 years, markets have risen after U.S. mid-term elections.

Stock market patterns have a fascinating way of repeating themselves. If you're looking for a ray of hope for the coming months, here's one to brighten your day.

Earlier this year, the Ned Davis Research organization in the U.S. published a chart which showed the performance of the S&P 500 Index since 1934 in the 12 months following its low point in a mid-term election year (which this is). The results are startling. In every single case, the Index recorded a double-digit advance. The lowest jump was 14.7% in 1946-47. The highest was 87.1% in 1954-55. The mean gain was an incredible 51%.

Of course, there is no guarantee that this 68-year track record will continue in 2002-03. But it's certainly something to think about.

This is an example of why the I have consistently taken the position that a balanced approach to investing is the wisest course. I know of cases in which people have become so discouraged by this long bear market that they have sold all their equities and retreated to cash. In doing so, they locked in some sizeable capital losses. But where are the capital gains against which to claim them?

I am certainly not predicting a 50% rise in the markets over the next year, or even that we've now seen the bottom. But I do predict that those who bail out of quality stocks now and lock themselves into GICs will be kicking themselves within a year or two.