Saturday, March 27, 2004

Stock market performance in presidential election years 

The Big Picture has a graph comparing stock market performance in years when the incumbent president's party won the election to years when it lost:

There are two major effects. First, the market did better in years when the incumbent's party won the election. Second, in years when the incumbent's party lost, although the market did worse overall, it spiked in November and December. These findings confirm the conventional wisdom that incumbents tend to be reelected if the economy is strong. If an incumbent is ousted due to a weak economy, the market rebounds at the prospect of a new administration.
Back to the Odd Hours main page
© 2004 Odd Hours
Reproduction permitted provided Odd Hours or the author of the quoted post is credited.