Stock Market Returns: Democrats vs. Republicans Tuesday, November 4, 2008
Posted by ei-forum in Investing.trackback
One of the topics that seems to be all over the news is what Presidency will be best for the stock markets.
At fist sight, one would tend to think that the markets would react more positively to a Republican victory:
- Generally big money and big businesses in the market tends to be Republican
- Republicans are all about capital accumulation and low taxes
- Republicans tend to favor growth through economic policy, free markets
- Etc….
But it appears that the above is not true… apart from the fact that there is a trend for a more pronounced bounce after a Republican victory, history shows us that the Democrats are better for the markets.
The New York Times has published a really interesting chart/study showing that under a Democratic Presidency the average yearly return is better and that a $10,000 investment in the S&P in 1929 would have grown to $11,733 if invested under Republican presidents only and to $300,671 at a compound rate of 8.9% under Democratic Presidents:
Stumble It!
Explore Investors Blog Network
[...] the gains during Democrat presidencies versus Republican presidencies (this excludes Hoover). Check THIS OUT to see a visual [...]
I think the reason for this is Democrats tend to view the markets as a barometer of the overall economy, and not the focus of it. For the overall economy to be good you have to consider the consumers that play an important roll in the economic health of businesses, both large and small.
we really hope that this is what will continue to happen….