Which political party has been best for stocks?Blog added by Todd Kirsch on January 30, 2014
Todd Kirsch

Todd Kirsch

Littleton, CO

Joined: January 24, 2014

Which political party has been best for stocks? The answer surprised me, and it might surprise you.

This chart came from an email to me from Oppenheimer as part of a larger article. Interestingly, stocks have performed poorly under a Republican president with a Republican Congress. Political stalemates appear to have worked best for stocks when a Democrat was in charge of the White House with Republicans in charge of Congress. I wouldn’t read too much into this chart, but I also wouldn’t automatically assume one political party is best for markets.
S&P 500 Index Annualized Returns/1928 through July 31, 20121

PresidentCongressReturn
RepublicanRepublican2.1%
RepublicanDemocrat8.6%
RepublicanSplit13.4%
DemocratSplit13.9%
DemocratDemocrat14.1%
DemocratRepublican18.2%

Stay invested, my friends.

[1] Bank of American Merrill Lynch, “Election 2012” August 16, 2012. Standard & Poor’s 500 Composite Index is a market-capitalization-weighted index that tracks the stocks of 500 primarily large-cap U.S. companies chosen for market liquidity and industry group to represent U.S. equity performance. Indexes are unmanaged. Their results include reinvested dividends and/or distributions but do not reflect the effect of any sales charges, commissions, or expenses. Past performance is not an express or implied guarantee of future results. Individuals may not invest directly in any index.

See also:

Investing in 2014

Why mutual funds can’t protect against a stock market crash
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