Equities in the United States have performed better if an incumbent president wins re-election than if a challenger is successful, according to analysis ofthe last twelve elections by Fidelity Worldwide Investment.
US equity prices rose an average of 10% in the year after an incumbent won, while they fell slightly when challengers got elected.
“Looking at stock market performance following the last twelve elections suggests that investors should, in the short term at least, be rooting for an Obama victory,” said Tom Stevenson, investment director at Fidelity Worldwide Investment.
The analysis also revealed that the US stock market has performed better under the Democrats than the Republicans in the last 48 years, challenging the assumption that the Republican party is more pro-business.
Fidelity found that the S&P 500 returned an average of nearly 12% a year under the Democrats, compared with about 5% under the Republicans.
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