Who’s better for stocks: Obama or Romney?
One of the questions I get asked these days is whether a win by Mitt Romney or by Barack Obama would be better for the stock market. To which the only honest answer is “I have no earthly idea.” Any competent and dispassionate market analyst will tell you that the financial and psychological states of the U.S. and world economies are the major factors, and that the President’s influence on these matters is far less than most people think it is.
Case in point: George W. Bush. He was a Republican, a free-market guy, right? Stocks, according to the conventional wisdom, should have boomed during his reign. After all, he dropped taxes on investment income to their lowest point in modern history in the name of helping investors and the economy. Well … oops! Rather than being a golden age for stock investors, his tenure was a disaster. The U.S. market lost 25.1% during his two terms, according to statistics assembled for me by Wilshire Associates. Had historical averages held, the market’s total return — capital gains plus reinvested dividends — would have more than doubled investors’ money during the eight years that Bush was in office. Instead, investors ended up with a quarter less than they started with.