The Grand Old Party (GOP) is known for supporting big business. So it pays to elect Republicans to the White House, right? If you analyze the stock market performance under Republican and Democratic presidents, the answer is a resounding NO. Democratic presidents generate average stock market returns in excess of the risk-free rate of 10.69% -- roughly six times the 1.69% earned under Republican administrations.

Investopedia describes the research of Pedro Santa-Clara and Rossen Valkanov who analyzed the value-weighted returns on stocks between 1927 and 1998 under Democratic and Republican presidents. And they found that the excess returns of stocks over the risk-free rate of return -- as measured by the Center for Research into Securities Prices (CRSP) indexes versus three-month Treasury bill rates -- were far higher for Democratic presidents (10.69%) than for Republican ones (1.69%).

Of course, these are just long-term statistics. Under the last Democratic president, stocks rose an annual average of 17.4%. The current Republican White House occupant has presided over an average annual decline of 1.1% -- the S&P 500 was 1,342 when he took over and stands at 1,233 today -- the only president of either party of the last 11 to oversee a decline in stocks.

Continue reading Are Republican presidents better for the stock market?

Are Republican presidents better for the stock market? originally appeared on BloggingStocks on Fri, 05 Sep 2008 17:29:00 EST. Please see our terms for use of feeds.

Instead of looking for the next hot stock, the next sure thing, why not throw some money into an index fund comprised of those companies that are already the number one providers of goods and services to the fastest growing segment of the population? Way back in August 2000 investment bank Samuel A. Ramirez & Co. put together a stock index to track the Hispanic market as an asset class. To qualify on the Hispanic Index, companies must have a majority of Hispanic owners or customers. Since its inception until early 2005, the Ramirez and Co. Hispanic Index (RCHI) was up 177%. Not bad at all when viewed against a 17% decline in the S&P for the same period.

HispanicBusiness.com has also put together its own Hispanic Business Stock Index (HBSI) to track heavily traded Hispanic companies in the U.S. It makes sense to track large Hispanic-oriented businesses as the Hispanic population in 2005 (last figures currently available) totalled more than 40 million, with a growth rate three times faster than the U.S. population as a whole. By 2010, total Hispanic disposable income is forecast to exceed $1 trillion. HBSI invests mainly in health-care, as well as financial and media companies whose primary customer base is Hispanics. There is considerable overlap between the two funds. HBSI limits its holdings to only US traded equities. RCHI includes several Puerto Rico-based companies.

The biggest holdings in the two portfolios include Univision Communications which reaches the homes of 98% of the U.S. Latino population, Hispanic Broadcasting Corporation, Entravision Communications and Spanish Broadcasting System. In the financial sector holdings include Popular Inc. (Banco Popular), International Bancshares Corp., United PanAm Financial and Metrocorp Bancshares, Inc.

Hispanic Stock Index originally appeared on BloggingStocks on Mon, 21 Aug 2006 14:21:00 EST. Please see our terms for use of feeds.