A Democrat In the White House is Better For Stocks?
Stock-Markets / Stock Markets 2011 Nov 12, 2011 - 11:34 AM GMTBy: Sy_Harding
The lead-up to next year’s election will bring a lot of claims from both parties. I thought I’d check some likely ones to make sure I don’t fall into the ‘lazy trap’ of repeating popular beliefs as fact when they might not be.
I was more than mildly surprised by my research.
It’s common knowledge, popular belief, historical fact, that the Republican Party is better for business, corporate profits, and the stock market – isn’t it? Democrats are more interested in pushing socialistic programs at the expense of business – aren’t they?
But wait a minute!
The following table shows the Dow’s gains and losses under Republican and Democratic Presidents over the last 50 years.
Over six Democratic terms the Dow gained 247.9%, or an average of 41.3% per term.
Over seven Republican terms the Dow gained 147.1%, or an average of 21.0% per term.
President |
R/D |
Term |
Beginning |
Ending |
Gain/ |
Kennedy/ |
Dem |
1961-65 |
615.9 |
874.1 |
+ 41.9% |
Johnson |
Dem |
1965-69 |
874.1 |
945.1 |
+ 8.1% |
Nixon |
Rep |
1969-73 |
945.1 |
1020 |
+ 7.9% |
Nixon/ |
Rep |
1973-77 |
1020 |
1005 |
- 0.1% |
Carter |
Dem |
1977-81 |
1005 |
964.0 |
- 4.1% |
Reagan |
Rep |
1981-85 |
964.0 |
1211 |
+ 25.6% |
Reagan |
Rep |
1985-89 |
1211 |
2168 |
+ 79.0% |
Bush Sr. |
Rep |
1989-93 |
2168 |
3301 |
+ 52.3% |
Clinton |
Dem |
1993-97 |
3301 |
6448 |
+ 95.3% |
Clinton |
Dem |
1997-01 |
6448 |
10786 |
+ 67.3% |
Bush Jr. |
Rep |
2001-05 |
10786 |
10783 |
- |
Bush Jr. |
Rep |
2005-09 |
10783 |
8776 |
- 18.6% |
Obama |
Dem |
2009-11* |
8776 |
11955 |
+ 36.3% |
*To October 30, 2011. |
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Could it be? Over the last 50 years investors, their portfolios, 401K and IRA plans, have made almost double the returns under Democratic Presidents as under Republican Presidents?
I then went back 110 years to 1900. The same pattern emerged, although the difference was not as striking as it has been for the last 50 years. From 1901 to 1961 the Dow increased an average of 36.7% per term when the president was a Democrat, and 32.1% when a Republican was in the White House.
The influence of one party or the other on the strength of the economy, business prosperity, and the stock market has clearly not been as popular wisdom suggests.
Sy Harding is president of Asset Management Research Corp., and editor of the free market blog Street Smart Post.
© 2011 Copyright Sy Harding- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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