Which Political Party Has Been Best for Stocks?

The answer might surprise you…it surprised me.  This chart came from an e-mail 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, 2012[1]

President       Congress        Return

Republican      Republican      2.1%

Republican      Democrat        8.6%

Republican      Split                 13.4%

Democrat        Split                 13.9%

Democrat        Democrat        14.1%

Democrat        Republican      18.2%

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.


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