Silverman: Markets, election outcome not linked

Stock Market

Stock Market

Every election year there is talk that one political party or another is better for the markets. Generally the implication is that if you elect a particular candidate, the stock market will go up a lot; if you elect the other, not so much. But what is the reality?

Since 1928, the median market return during a Democratic president's four-year term has been 27.5 percent. When a Republican holds the office that number "plummets" to 27.3 percent. As you can see from the numbers, how you vote on Tuesday will not fundamentally change the stock market.

Since World War II, the top three term-long stock market performances occurred under Democratic administrations and the three worse under Republican ones. Even so, the averages are just about the same.

Further complicating matters are Congress and economics. After all, it is Congress who determines the laws of the land and where money gets spent. And then there is the subject of economics, which shows that many actions a president or Congress make take years to have an economic effect — actions from one administration will affect the next.

What have we learned from history? One: Neither party can claim to be the best one for those who invest in the stock market. Two: Even if one were to be best, some of that effect was a delayed effect of the administration before it. And three: While the presidency is an important and vital political office, the president represents only one of the branches of government and does not make the laws of the land nor control the purse strings.

All that said the president is the leader of our country, the commander-in-chief of our armed forces, and the de facto head of that political party. The president controls the agencies that carry out the laws, nominates members of the Supreme Court and has the power of veto. The office is rather important ... it's just not critical for stock market performance.

On Tuesday you have a very serious duty: To elect the people who will represent us locally, at the state capital and in Washington, D.C. Readers of this column know that I don't have a bias toward either party as both have behaved rather badly of late. The extremes of both have forced promises of no compromise on those for whom the art of compromise is basic to the job at hand.

We owe it to ourselves, and we owe it to our children and their children, to ignore the rhetoric, fully examine the issues, and cast our vote based on knowledge, not campaign verbosity and emotion. So if you haven't voted yet, Tuesday is the day that brings not inconvenience, but privilege.


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