"Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans."<p>- Robert F. Kennedy
It's too bad this analysis was done against the Dow Jones Industrial Average which is a price weighted index of only 30 large cap stocks and widely considered to be a poor indicator. Something like the S&P 500 index would would have been a better choice though it doesn't go as far back as the DJIA.
It seems to me that these results don't take into account the fact that presidents inherit the policies of the previous terms. Some presidents can ride on the coat tails of former policies and take the credit or blame just because they're the ones serving. It can take as long as 8 years before the consequences of bad policy can rear its ugly head.
Stock variation doesn't really say much other than probably a degree of general confidence about how much profits companies can take.<p>How about actual corporate earnings? (Thereby normalizing for wacky p/e ratios?)<p>And what about bond yields? (Because bonds and stocks are the primary assets, valuations flow from one to the other)<p>Interest rates? (Because cheaper Fed rates entail easy money)<p>GDP? (Because that's a measure of the economy)<p>Housing prices? (Because that's a measure of consumer spending, i.e. 'the rest of us')<p>Housing starts? (A measure of business confidence in consumer)<p>Employment? (A good measure of overall health)<p>Inflation? (A variety of factors but it puts the others in perspective)<p>Instead of this 'stock prices' thing they should show us all that for perspective.
Allegedly, stocks which are highly exposed to government spending outperform their low-gov-spending peers under a Dem presidency, and underperform during a GOP one: <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1572801" rel="nofollow">https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1572801</a>
I've always been more curious about this stat when:<p>-President and Congress majority are same party (and by party)<p>-President and Congress majority are different party.<p>I suspect different parties are better, to reign in the excesses of each. But not sure. Maybe I'll do it some time.
Makes no sense to measure from day of taking office. With a 1 year offset, Trump's market goes from performing "very well" to the erratic mess that it has been ever since.