Chart o’ the Day: Something else you can stop spending time on

The question of which party being in the White House is better for the stock market has been debated for as long as there has been a White House or a stock market.

Vanguard is out with a definitive chart that tells you everything you need to know about this question: It’s a waste of time…

Vanguard research going back to 1853 shows that stock market returns are virtually identical no matter which party controls the White House [Figure 2].

“Once you take into account volatility, the returns of the stock market under Democratic and Republican administrations are virtually indistinguishable,” Lemco said. “This is one more reason why investors should focus on more meaningful factors when it comes to their portfolios, such as diversification and controlling costs.”

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Josh here – Similarly, Vanguard finds that which party wins the presidency is unimportant to the bond market as well. The Federal Reserve has most of the influence there.

This is not to say that there are not ramifications for stocks and bonds depending on which President and who controls Congress. Of course there. Obama’s administration was great for many health care industries and pretty much bankrupted the coal industry (ok, in conjunction with market forces). It’s just that, overall, what happens in the stock and bond markets over time is party-agnostic.

160 years of history tell us this very plainly.

Another thing you can stop spending time on. Which is nice.

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