Stock Trading and Other Things

Why does the stock market historically perform better during Democratic administrations?

See links below for evidence demonstrating that the stock market performs better during Democratic administrations than Republican administrations.

http://www.frbsf.org/images/pdfcharts/el98-19a.pdf
http://www.frbsf.org/images/pdfcharts/el98-19a.pdf


dpj5: Let's see if what you're saying is true:

As I look over the data, I see that the two of the three periods with the biggest gains (33-36, 97-01, and 49-52) involved Democratic Congressional majorities as well.

The data do not support your claim. Please try again.
John--Excellent points, but they also illustrate that the stereotype that Democrats favor regulation is not always true.

Public Comments

1. Democrats are seen as being pro-regulatory, and more willing to enact laws against Wall Street and laws against CEOs. This is a GOOD thing.

The difference in realized returns can be attributed to the market being systematically positively surprised by Democratic policies. Rational expectations for higher interest rates under left-wing administrations decreases demand for stocks among traders.

This decrease in demand leads to a decline in stock price volatility not only during the incumbency of left-wing governments, but also when traders expect the left-wing party to win elections.

Since all we taxpayers now own the bail-out corporations, we have a right to oversee them.

Before they declare anything for themselves, they must FIRST pay back the loan monies.

This is an aside, but truly all those CEO's need to be fired. The people who know BEST how business works and how business SHOULD be CORRECTLY run are long-time small business owners. They are the people who should be in charge of over-seeing that business is being run correctly.

2. I never understood that either.

3. Lack of regulation and oversight. Under the Clinton administration, there was virtually no investigation of stock scams as we saw from Bill's buddy Kenneth Lay.

4. You got me thinking so I googled this question, according to everything I looked at ( 6 different sites) it looks like the market does better when a Dem is in office.

5. It's usually the Republicans that have the majority in the Senate during those times. That's were the real laws and regulations get passed.

6. Maybe because dems dont regulate. The big-wigs get to cheat more cuz the libs arent looking at what theyre doing?

7. Ironically, the stock market has performed better for John Kennedy and Bill Clinton than it did for other Republican Presidents.

Interestingly though, the policies of Bill Clinton and John Kenedy were very pro-market, less government policies such as free trade, lower taxes and smaller government. Compare this to Richard Nixon (price controls, high regulation) and George HW Bush (tax increases) and you see that althought Clinton and Kennedy were Democrats, their policies were actually more conservative than Nixon and the elder Bush.

The current Bush has spent wildly and driven up the national debt to absurd levels which combined with too much government intervention (Community Reinvestment Act, Sarbanes-Oxley, etc.) have stifled the economy.

8. Most Democrats are against war, and want the government to intervene with economics. When we are not in times of war, money from the economy is not going towards weapons. Therefore, the economy is more active, and the stock market rises. As well as Democrats would prefer to have the government to intervene when we are in times like these, giving tax money away, this is what causes our taxes to rise during their presidency (i.e. Jimmy Carter).

9. The stock market was doing marvelously for te past few years. Up until your demoratic buddies decided to let loose on fannie and freddie. Your darlings, your party pushed for those loans.

I wouldnt be surprised if we find out that they let them fail so the country would be ready for change. They want more govt involvement, they have it. Buying banks, housing, now the car industry.

That site locked me up. Didnt even see it.

10. It's been down 99% of the time since Obama got elected, idiot.

11. Because they always have their hand in your pocket.