Is the market really better under a Democratic administration?

I was checking the stock market at CNBC a few minutes ago and a href=”http://www.cnbc.com/id/27558631″clicked on an article /aentitled, “Build an Investment Strategy for an Obama Presidency.” Here is what I learned:br /br /blockquoteTo shift your long-term investment strategy so that you take advantage of the next four years – and then some – stay with a diversified portfolio but consider making adjustments in your holdings to capitalize on an Obama presidency. Zachary Karabell, economist and president of River Twice Research, reminded that despite popular belief, the stock market tends to do better under a Democratic administration than a Republican administration. /blockquotebr /br /I remember reading about some study on Democrats being better for the market than Republicans a while back in the blogosphere and decided to find out if this was true. Not according to emThe Wall Street Journal /emthat says a href=”http://online.wsj.com/public/article_print/SB122117691244025843.html”divided government is best for the market:/abr /blockquoteThen 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%.br /br /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%.br /br /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.br /br /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./blockquotebr /br /No, I guess not.