GOP presidents are better for investors, right?

Partisanship aside, here's a historical look at market returns under Democratic and Republican administrations. The data might surprise you.

By TheStockAdvisors Nov 25, 2011 11:35AM
Image: Politics (© Jim Zook/Images.com/Corbis)By Sy Harding, Street Smart Report

The lead-up to next year's election will bring a lot of claims from both parties, so here's a look at the record over 50 and 100 years to see which party in the White House is historically better for stocks.

It's common knowledge that the Republican Party is better for business, corporate profits and the stock market, isn't it? Democrats are more interested in pushing social programs at the expense of business, right?

But wait. Check this out:
  • Kennedy/Johnson (Dem) administration (1961-1965) -- up 41.9%
  • Johnson (Dem) administration (1965-1969) -- up 8.1%
  • Nixon (Rep) administration (1969 to 1973) -- up 7.9%
  • Nixon/Ford (Rep) administration (1973-1977) -- down 0.1%
  • Carter (Dem) administration (1977-1981) -- down 4.1%
  • Reagan (Rep) administration (1981-1985) -- up 25.6%
  • Reagan (Rep) administration  (1985-1989) -- up 79.0%
  • Bush Sr. (Rep) administration (1989-1993 -- up 52.3%
  • Clinton (Dem) administration (1993-1997) -- up 95.3%
  • Clinton (Dem) administration (1997-2001) -- up 67.3%
  • Bush Jr. (Rep) administration (2001-2005) -- unchanged
  • Bush Jr. (Rep) administration (2005-2009) -- down 18.6%
  • Obama (Dem) administration (2009 through Oct. 30, 2011) -- up 36.3%
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.

Could it be? Over the past 50 years, investors 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 past 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 clearly has not been as popular wisdom suggests.

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10Comments
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As the article says, the republicans are more favorable for corporations. But to look a little deeper at the democratic party, they are generally more favorable for the working man, why the unions have historically supported the democrat party. We are a consumer driven economy, when consumer confidence goes up, consumer spending also rises. This increased consumer spending, results in higher corporate profits, which equals higher stock prices. Higher corporate profits by increased sales equal more for the corporations bottom lines, than the tax breaks, the republicans historically give the corporations.
Nov 26, 2011 1:24AM
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This article won't stay up for very long. It doesn't state what the big money wants to hear. Obama 2012.
Nov 25, 2011 5:53PM
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OBAMA in 2012! Thumbs up

 

VAN HOLLEN in 2016! Thumbs up

Nov 26, 2011 2:13PM
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So, the bottom line is this: When something bad happens, and the derivative obligations are triggered, the FDIC will be on the hook, thanks to the Federal Reserve. The counter-parties of Bank of America, both inside America and elsewhere around the world, will be safely bailed out by the full faith and credit of the USA. Meanwhile, the taxpayers and dollar denominated savers will be fleeced again. This latest example of misconduct illustrates the error of allowing a bank-controlled entity, like the Federal Reserve, complete power over the nation's monetary system. The so-called "reforms" enacted by Congress, in the wake of the 2008 crash, have vested more, and not less, power in the Federal Reserve, and supplied us with more, rather than less instability and problems.

This is not an isolated instance. JP Morgan Chase is being allowed to house its unstable derivative obligations within its FDIC insured retail banking unit. Other big banks do the same. So long as the Federal Reserve exists and/or other financial regulatory agencies continue to be run by a revolving door staff that moves in and out of industry and government, crony capitalism will be alive and well in America. No amount of Dodd-Frank or Volcker rule legislation will ever protect savers, taxpayers or the American people. Profits will continue to be privatized and losses socialized.

Nov 27, 2011 8:56PM
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Gee, don't tell Rush. Another Right Wing lie goes down.
Nov 26, 2011 2:09PM
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Our corrupt government must be replaced and regulated but insider trading is nothing compared to the Federal Reserve. Please spread the word. This must not be allowed. See below.

Seeking Alpha

Oct. 21, 2011

Bloomberg reports that Bank of America has shifted about $22 trillion worth of derivative obligations from Merrill Lynch and the BAC holding company to the FDIC insured retail deposit division. Along with this information came the revelation that the FDIC insured unit was already stuffed with $53 trillion worth of these potentially toxic obligations, making a total of $75 trillion.

Derivatives are highly volatile financial instruments that are occasionally used to hedge risk, but mostly used for speculation. They are bets upon the value of stocks, bonds, mortgages, other loans, currencies, commodities, volatility of financial indexes, and even weather changes. Many big banks, including Bank of America, issue derivatives because, if they are not triggered, they are highly profitable to the issuer, and result in big bonus payments to the executives who administer them. If they are triggered, of course, the obligations fall upon the corporate entity, not the executives involved. Ultimately, by allowing existing gambling bets to remain in insured retail banks, and endorsing the shift of additional bets into the insured retail division, the obligation falls upon the U.S. taxpayers and dollar-denominated savers.

Even if we net out the notional value of the derivatives involved, down to the net potential obligation, the amount is so large that the United States could not hope to pay it off without a major dollar devaluation, if a major contingency actually occurred and a large part of the derivatives were triggered. But, if such an event ever occurs, Bank of America's derivatives counter-parties will, as usual, be made whole, while the American people suffer. This all has the blessing of the Federal Reserve, which approved the transfer of derivatives from Merrill Lynch to the insured retail unit of BAC before it was done.

Contrary to popular belief, which blames the global financial crisis on subprime borrowers, it was the derivatives, based upon the likelihood that those borrowers would pay their debts, that were the primary catalyst triggering the global economic crisis of 2008. Back then, the derivative obligations of AIG imploded the insurer. Under the pressure of fear-mongering from the Federal Reserve and the financial industry, the U.S. government committed hundreds of billions of dollars to bail out AIG's counter-parties, including the biggest banks of Europe and America. Had the government not stepped in, virtually all the banks on Wall Street would have gone bankrupt. A host of European and Asian banks would have followed.

Nov 25, 2011 8:14PM
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I KNEW IT....this spells doom for your 'policies',  MG- Ha ha ha..

Hope you had a nice Thanksgiving, though.

Nov 28, 2011 7:39AM
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At the very least, we should put apples in the same basket with other apples.  The GOP is not going to give any low-income earner a chance and the other side will continue to accept the whatever is best for them personally.  We have lawmakers in operation who could care less about others.  They want common folk to take cuts and pay taxes while they live out the benefits and enjoy whatever they can get from their "public service."  After all, their public service comes first.  Get it?  

 

An apple of any color and shape is an apple.  Think about all the benefits and taxes we ultimately pay and compare it all with what lawmakers have in their pockets.  It is all one big game, including the stock market.

Nov 25, 2011 1:54PM
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LOL...  Democrats believe that you can INFLATE.  They believe that this is good.  It helps debtors at the expense of lenders.  The stock market adjusted for inflation has done poorly.

 

If the gist of this article were true, that the working man salary would PURCHASE twice what it could in 2000.    The true deal is that the working man now recieves less in compensation than ever before. 

 

Contrary to what '57' States' and his far left media allies tell you...you cannot TAX, BORROW , DEBASE or SPEND your way to prosperity...

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