Political Fighting is Sorta Good…For the Markets

Standard

Yep. That’s about the only thing our political strife produces: solid stock performance. According to S&P Capital IQ research, a mix of a Democratic president and Republican Congress produces the highest annual returns for the Standard and Poor 500 Index (over 15 percent annually).

Also, when there’s a Democratic president and Congress/Senate are both Republican, the performance is over 13 percent.

Not all gridlock is good, though. There are some scenarios where a mix of the three produces underperformance. One scenario is a Republican president and Democratic Congress/Senate, producing only about 5 percent yearly gains.

For this entire time period, starting in 1945, the S&P 500 averages 8.8% per year.

Here’s a link to the article I found explaining this phenomenon. Most articles and research look only at which party controls the presidency. This research is pretty unique in that it covers who controls both houses and the presidency.