Best Financial Markets Analysis Article 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 Dow	Ending Dow	Gain/ Loss
Kennedy/ Johnson	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/ Ford	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.

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.

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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