Friday, October 20, 2006

Why I Don't Mind if the Dems Win the House

It makes the Stock Market go up for the most part. Check out this article.

One of the more noteworthy aspects of the chart given the upcoming election
is that divided executive and legislative branches have generally been good for
the stock market. In fact, in the thirteen instances where the same party did
not control both houses of Congress and the Presidency, the market has risen in
all but two periods for an average gain of 23%, while in the ten periods where
the same party controlled all three branches, the market has risen in seven
periods for an average gain of only 11.3%.


That chart they have on that site is pretty good because it shows which sectors do well in a divided government. The 1981-1985 period is where the Senate and the Executive is controlled by the Repubs and the House is controlled by the Dems. In those years the best performing sector was Consumers Discretionary for one year and Consumer Staples for two years.

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