Jeremy Siegel is asking which political party is better for the economy: Republicans or Democrats. He kills the suspense only a few paragraphs into the story (and I’ll spoil it for you):
Despite the behavior of the market during the last Presidential election, over longer periods of time, the stock market has done significantly better under Democratic administrations.
He presents data on market performance during all presidential administrations since 1948, and stocks have simply performed better when Democrats were in the White House. Siegel does admit that you can’t blame a sitting president for your portfolio returns. The current Bush, for instance, took office at the peak of what we’ve so far determined a bubble; there was almost nowhere stocks could go during his first term but down (other than up).
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8:37 am (reply)
Interesting, however, he basically argues his results into the ground. For instance, when he states that you can’t blam a sitting president for your returns. That goes for pretty much everything. I think, however, if you could isolate the entire market away from the technology sector (which cannot), then then numbers for the past 30 years would be more in favor of the Republicans. Clinton had a good boost from the tech bubbble, and Bush 43 got burned by it.
There is another interesting coincidence that occurs with the economy and presidential elections. Whenever there is a major shift in party control, the market suffers. When Clinton was elected, the market went down, but was able to rebound. The same has happened for Bush II. However, I think it is great have some volitility in the market, it gives people an opportunity to get into the market and make up for lost ground, and then the market rebounds. That is why you must weather the storm in a down market, and you will even gain from it if you invest more, at that time.
10:38 am (reply)
I guess this show that there are a lot of differences between what a group of people say they support and what actually happens. This is the second example that I have found. The first was written by the dean of Notre Dame almost two years ago:
http://www.nytimes.com/2004/10/11/opinion/11roche.html?ex=1255233600&en=c63e0c998a63bdb7&ei=5088&partner=rssnyt
10:48 am (reply)
I don’t believe that the stock market IS the economy. An analysis of one aspect of the economy does not make any sort of statement about how it has done as a whole. What I would like to see is an analysis of Unemployment ratios, GDP, export/import, average personal income, infaltion, all that stuff that truely makes up our economy. After all the stock market is nothing more than the “I’ll trade you my pudding for your cookie” that kids do in the lunch room. What people think something is worth (stocks for instance) can be right, but can often be wrong (the tech bubble).