under Democrats. But this has not been true over the past 60 years, when
the market performed far better under the Democrats whether or not in-
flation is taken into account. Perhaps this is why the market’s reaction to
a Democratic presidential victory has not been as negative in recent
years as it was in the past.
230 PART 3 How the Economic Environment Impacts Stocks
TABLE 13–3
Presidential Administrations and Stock Returns (Stock Returns Taken from Election Date or Date of
Taking Office, Whichever Is Earlier; Italics Represent Democratic Administrations)Months Annualized Annualized
in Nominal Real
Office Stock Return Return
Harrison R 11/88 - 10/92 48 5. 74 0. 04 5. 70
Cleveland D 11/92 - 10/96 48 -3. 31 -1. 91 -1. 43
McKinley R 11/96 - 8/01 58 20. 66 0. 00 20. 66
Roosevelt, T. R 9/01 - 10/08 86 4. 81 1. 39 3. 38
Taft R 11/08 - 10/12 48 7. 54 0. 82 6. 67
Wilson D 11/12 - 10/20 96 4. 68 9. 42 -4. 33
Harding R 11/20 - 7/23 33 5. 48 -4. 05 9. 93
Coolidge R 8/23 - 10/28 63 28. 04 0. 12 27. 88
Hoover R 11/28 - 10/32 48 -20. 42 -6. 29 -15. 08
Roosevelt, F. D 11/32 - 3/45 149 11. 52 2. 36 8. 94
Truman D 4/45 - 10/52 91 14. 66 5. 54 8. 64
Eisenhower R 11/52 - 10/60 96 14. 96 1. 35 13. 42
Kennedy D 11/60 - 10/63 36 15. 15 1. 11 13. 88
Johnson D 11/63 - 10/68 60 10. 39 2. 77 7. 42
Nixon R 11/68 - 7/74 69 -1. 32 6. 03 -6. 93
Ford R 8/74 - 10/76 27 17. 21 7. 27 9. 27
Carter D 11/76 - 10/80 48 11. 04 10. 02 0. 93
Reagan R 11/80 - 10/88 96 15. 18 4. 46 10. 26
Bush, G. H. W. R 11/88 - 10/92 48 14. 44 4. 22 9. 81
Clinton D 11/92 - 10/00 96 19. 01 2. 58 16. 01
Bush, G.W. R 11/00 - 12/01 74 1. 62 2. 51 -0. 87
Democrat 44 .0% 10. 85 4. 12 6. 49
Republican 56 .0% 8. 59 1. 57 6. 91
Overall 100% 9. 58 2. 69 6. 71
Democrat 42 .1% 15. 26 3. 64 11. 27
Republican 57 .9% 9. 71 3. 78 5. 71
Overall 100% 12. 01 3. 72 7. 99Average from 1948 to
October 2006Average from 1888 to
October 2006Party DatePresident’s
NameAnnualized
Inflation