Do Presidential Elections Predict Market Returns? (Journal Article)

You have probably heard that equity investors prefer Republicans over Democrats in the White House. This column explores this piece of conventional wisdom by looking at one-year market performance after a presidential election. It turns out that there may be a short-term trading opportunity for risk-tolerant investors; but over the long run, the markets do not appear to favor Republicans or Democrats.

Author: John E. Grable, PhD, CFP, holds an Athletic Association endowed professorship at the University of Georgia where he conducts research and teaches financial planning. Dr. Grable is best known for his work related to financial risk tolerance assessment and behavioral financial planning. He serves as the director of the Financial Planning Performance Laboratory.

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