What about the Whigs?
As Democrats and Republicans kick off the final countdown to the Nov. 4 election, strategists at U.S. investment bank Lehman Brothers have done some interesting data mining.
Figures looking back economic conditions in 1948-2007 show the economy under Democrats enjoyed a higher GDP growth rate (4.2 percent vs 2.8 percent for Republican adminsitrations) and a lower average unemployment rate (5.1 percent vs 5.9 percent).
Looking at a longer timeframe since 1828, however, Lehman strategists found that government and corporate bonds fared better when a Republican occupied the White House (it excluded Whigs).
On average, Treasury bonds returned 4.82 percent preceding an election year with a Republican incumbent (3.38 percent for a Democratic one).
Equities fared less well with a Democratic incumbent during an election year (9.13 percent) while averaging 13.76 percent with a Republican incumbent during an election.
But Lehman ends the research with a disclaimer: “Trading rules based on such long-term averages suffer from potential data-mining distortions… Before embarking upon any portfolio course based mainly on ‘election-cycle averages’, let’s wait for the outcome of the election.”
(Photo: Mike Segar/Reuters)