I realize that it's not a reason to pick a president, but if you care about your stock portfolio, you'd be better off with a Democratic president. How so? Peter Siris of Guerrilla Capital has run some numbers -- comparing an investment of $10,000 in the S&P 500 under Republican administrations to the same investment under Democratic ones. He permitted me to preview these numbers which will run in his New York Post column on November 3rd.
Since 1929 both parties have controlled the White House for 40 years and Siris estimates that the $10,000 would be worth $11,733 under Republican administrations and $300,671 under Democratic ones. According to Siris, "for whatever reason, Republicans have been in office during the three worst stock market declines: The Great Depression, the early to mid-1970s, and the current market."
That may sound interesting but what about recent presidents? Under the Clinton administration, the S&P 500 rose the most in the last 60 years -- up an average of 17.4% per year. The only president who posted a negative performance is a familiar name -- George W. Bush -- under his administration, the S&P 500 has fallen 27% from 1,342 to 979. It's an exceptional record and one that I hope will never recur.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.











Reader Comments (Page 1 of 1)
11-02-2008 @ 4:54PM
kilroy said...
Peter - thanks for the blatant electioneering for the Democrats just before the election.
You did leave out Democrat and Pacifist Jimmy Carter and his long gas lines, poor Stock Market, and Certificates of Deposit paying 18%.
Keep picking up your P.R Checks from the Obama campaign.
10-31-2008 @ 11:33PM
Jesse W said...
quite interesting; i would never have guessed it would be THAT drastic!
Jesse W.
http://www.subprimeblogger.com
11-01-2008 @ 3:14AM
Gary E. Sattler said...
Clinton just rode the tide of Reaganomics.
11-01-2008 @ 6:25AM
GEOCEO said...
Nice try pal but George Bush's 27%fall was a direct result of the recession he inherited from the Clinton administration. Clintons 27% rise was a result of the dot.com bubble which was really no accomplishment.
11-01-2008 @ 6:45AM
JCH said...
The Carter bashing on inflation is genuinely dumb.
Average annual inflation during each preceding President's term in office:
Ike - 2.2%
JFK - 1.1%
LBJ - 2.4%
RMN - 4.8%
GRF- 9.4%
You will note it was doubling over each term in office from JFK to Ford. Note - the press and the Republicans screamed all through the primaries that JFK's plan to stimulate the economy by cutting taxes would cause rampant inflation.
Carter actually destroyed the historic inflation trend. The average inflation during Carter's term did come even remotely close to doubling.
Carter selected Volcker to be the Fed Chairman specifically because he thought Volcker's plan for attacking inflation would work.
So Reagan was actually the one who benefitted from Carter's efforts on fighting inflation.
Reagan actually wanted to replace Volcker, but members of his cabinet rushed in to change his post-disease mindlessness.
11-01-2008 @ 9:01AM
I said...
Maybe that is because this whole housing crisis started with the Clinton Administration. The stocks and market rose from their deceit and lies to the public and giving away home and loans to people who could not afford it. The democrats were all part of it and then blame Republicans because it boils over while Bush is in office. Are anyones eyes and ears open?
11-01-2008 @ 9:59AM
DaveF said...
You mean Reaganomics where the deficit went up to 4.3 Trillion dollars, largest percentage fiscal deficits in our nations history, junk bond scandall, Iran/Contra scandal, S&L Scandals, double dip recessions. Bush looks that much worse in comparison to this is incompetant. Besides Carter inherited inflation due to the Veitnam War run by you quessed it another republican - Nixon.
11-01-2008 @ 11:56AM
John D said...
It's the judges they appoint that will have greatest impact on this nation. The taxes will always go up and down, but our values should be protected like when we were kids.
11-04-2008 @ 2:16AM
sharetipsinfo said...
Dear Visitors,
Now we have seen that Nifty has already cracked down alot due to recession fear. Reality sector was the worst affected in this fall. Stocks like WWIL, Unitech etc has fallen quite drastically. Investors are loosing confidence in the market. Maximum stocks are trading atleast 30% down from there 52 week high in Indian stock market .
Now one can think of buying stocks for Long term.
Few best stocks to be picked are:-
1. Reliance
2. Suzlon
3. Sesagoa
4. LT
Just grab these stocks at every dip and stay invested for atleast 3 months and see the appreciation yourself.
Regards
SHARETIPSINFO TEAM
For any doubt please feel free to ask us.
Thanks
Regards
SHARETIPSINFO TEAM
11-19-2008 @ 12:05AM
sharegyan said...
Hi,
Once again after crash Nifty has started going up. Now we suggest all rises should be used as an opportunity to exit old long positions.
This bull run will continue for few more days. Overall market is in bearish mood as in medium term its just a small rally due to short covering
and result season.
Happy Trading,
ShareGyan
11-19-2008 @ 12:06AM
sharegyan said...
Hi,
Once again after crash Nifty has started going up. Now we suggest all rises should be used as an opportunity to exit old long positions.
This bull run will continue for few more days. Overall market is in bearish mood as in medium term its just a small rally due to short covering
and result season.
Happy Trading,
ShareGyan
11-04-2008 @ 2:18AM
sharetipsinfo said...
Dear Visitors,
Now we have seen that Nifty has already cracked down alot due to recession fear. Reality sector was the worst affected in this fall. Stocks like WWIL, Unitech etc has fallen quite drastically. Investors are loosing confidence in the market. Maximum stocks are trading atleast 30% down from there 52 week high in Indian stock market .
Now one can think of buying stocks for Long term.
Few best stocks to be picked are:-
1. Reliance
2. Suzlon
3. Sesagoa
4. LT
Just grab these stocks at every dip and stay invested for atleast 3 months and see the appreciation yourself.
Regards
SHARETIPSINFO TEAM
For any doubt please feel free to ask us.
Thanks
Regards
SHARETIPSINFO TEAM
11-16-2008 @ 12:01AM
checksnbalances said...
If you have time...
Let's get something settled once and for all. Have the stock markets and the economy historically done better under Democrats or Republicans?
There is no shortage of exaggerated claims on both sides. But on the surface, the Democrats would appear to have statistics on their side. How many times have you heard some Democrat pull out some "study" (they always call it a study, it sounds so scientific) by some professor or some "nonpartisan" think tank that purports to show that since 1948 (it's always 1948 for some reason) stock performance or economic growth has been better under Democratic presidents than Republican ones?
So there you go. Forget about the tax increases. Forget about the regulations, the protectionism, the union influence. Democrats are great for growth. The study proves it!
I've run the numbers myself. Superficially at least, the Democratic claims are true: Since 1948, the Standard & Poor's 500 total return (capital gains plus dividends) has averaged 15.6% when a Democrat was in the White House and only 11.1% when a Republican was in the White House.
You get a similar result if you look at growth in real gross domestic product. Under Democratic presidents, the average since 1948 has been 4.2%. Under Republican presidents it has been only 2.8%.
But it's not so simple when you study that "study." First, not all Democrats act like Democrats, and not all Republicans act like Republicans. John F. Kennedy, for example, was an enthusiastic supply-side tax cutter, and George H.W. Bush raised taxes. Bill Clinton promoted free trade, and Richard Nixon imposed wage and price controls.
If you assign those four presidents to the opposite party based on that -- make the two Democrats into Republicans and the two Republicans into Democrats -- the numbers completely reverse. Now stocks average 14.7% under Republicans and only 10.5% under Democrats.
In fact, it turns out that if you do just one single switch -- if you make Richard Nixon into a Democrat -- it's enough to reverse the numbers. Then stocks average 14% under Republicans and only 12.1% under Democrats. This fact discredits this whole study more than it does Republicans, or even Richard Nixon himself. Any analysis that can be undone by omitting or changing a single data point isn't very robust.
There are other problems with this study as well. While stocks could be expected to react very quickly to changes and expectations of changes in the political environment, the whole economy doesn't just turn on a dime. So when we compare real GDP growth under Democratic and Republican presidents, maybe we should lag the results by a couple years. That is, we'll assume that the growth in a given year was the result of the president's policies from two years ago.
When we do that (putting Nixon back as a Republican, by the way), we find that the economy performed pretty much exactly the same regardless of the president's party: 3.5% under Democrats and 3.4% under Republicans.
But then who ever said that the president alone determines the economy or the stock market? It's Congress that makes the laws. The president just signs them. Based on congressional control, the study results look very different. Under Republican Congresses, stocks have averaged a 19% return, while under Democratic Congresses only 11.9%. Real GDP growth, lagged two years, has averaged 3.7% under Republican Congresses, and only 3.2% under Democratic ones.
Then there are the various party mixes between the president and Congress. If John McCain wins and we have a Republican president and a Democratic Congress, history leads us to expect an average 10.3% total return from stocks and 3.3% real GDP growth. If Barack Obama wins, and we have a Democratic Congress too, then according to history stocks will average 13.8%, and real GDP growth 3.3%.
But that's no argument for voting for Mr. Obama. Vote for Mr. McCain -- but vote for Republican senators and representatives too. When Republicans have controlled the whole government, it blows away anything Democrats can do. Stocks have averaged 17.5% and real GDP growth 3.3%.
By the way, as fond as Democrats are of saying how poorly stocks have performed under George W. Bush, here's a sobering fact: Stocks averaged 14.1% return in those Bush years when Republicans controlled Congress -- and when Democrats got in there and mucked things up, the average has been a loss of 8.9%. That's not even including 2008 year-to-date, which doesn't look so pretty.
If the electorate were really smart, it would elect a Democratic president and a Republican Congress. Under that deal, stocks have averaged a 20.2% total return, and real GDP averaged 4%. That tells us that economic and stock market success isn't really about partisan politics at all. Sadly, nobody has a political incentive to conduct a study about that.
12-10-2008 @ 4:14AM
sharegyan said...
Hello,
Stock market is a volatile market. Investors are afraid of entering Indian stock market due to such volatile conditions. FII are the one who are selling
shares like anything. Now we can see some relief rally in the market but still recession can curb the movement of the stock market. In these sort of market investors and
traders are confused like which stock they should select that is stock selection is the major issue now.
Have any doubt lets discuss it and help everyone
Happy Trading,
ShareGyan
1-14-2009 @ 4:20AM
sharetipsinfo said...
Stock market is a volatile market. Where people invest with the intention of making money but many traders and investors end’s up as a looser. Must be wondering what makes one trader a winner in the stock market and another one as a looser in the market.
Apart from this result season is also going on. Though not that favorable results are expected this time. But INFOSYS came up with very good results now we need to wait till giants like RELIANCE, SBI and other declares there numbers. As they will be responsible for further market movement.
For now we strongly suggest everyone not to take too many deliveries in there portfolio. Just wait for some more time for quality value buying.
In Indian stock market many people have many doubts but they don’t want to clear them by consulting professionals nor they want to raise there questions where other traders and investors can help them out. But now many portals are coming up with QNA sections where investors and traders can exchange there views about stock and stock market. Indeed it’s a great help for everyone who are related to stock market.
Regards
Regards
SHARETIPSINFO TEAM