Democratic Party win might boost market

[question everything]

Inland Valley Daily Bulletin

By Andrew Moyle
Staff Writer

Monday, August 09, 2004 - Republicans, good. Democrats, bad.

Ask any investment adviser or political science professor, and he or she will tell you that this age-old mantra pervades the investing class. According to the commonly-held perception, Republican presidents’ business-friendly policies help to prop up the stock market, while Democratic presidents look out for interests other than big business, and thereby hurt the markets.

(snip)

According to a study released last year by Pedro Santa-Clara and Rossen Valkanov, professors at UCLA’s Anderson School of Business, the return on the stock market is higher under Democratic presidencies than Republican ones. And not just a little bit higher. Santa-Clara and Valkanov put the difference at nine percent for value-weighted sampling of the market, and 16 percent for the equally-weighted portfolio.

The study, titled ‘‘The Presidential Puzzle: Political Cycles and the Stock Market,’’ examines the performance of the markets during the 18 four-year presidential terms from Herbert Hoover through Bill Clinton. In addition, growth in the country’s gross domestic product – the total measure of all domestically produced goods and services – was slower under the eight Republican terms than under the 10 Democrat ones, although Democrat administrations oversaw significantly higher rates of inflation.

(snip)

Before and after elections, market performance is roughly equal between both parties, and only begins to truly diverge some 100 days after the election, when Democrats push into the lead. That separation continues throughout the remainder of the term, widening significantly after 800 days.

More..

http://www.dailybulletin.com/Stories/0,1413,203~21482~2323181,00.html#

Andrew Moyle can be reached by e-mail at [e-mail] or by phone at [phone].

[NMDemDist2]

1. i hope this makes the front page of the WSJ

but I knew it already...