Quote from eminitrader007:
Over the years, stock analysts have suggested that the market prefers Republicans in the White House. This apparently arises from the view that Republican administrations are more favorable toward business than Democratic administrations. Most studies attempting to document this have focused on the stock returns around elections, and find weak evidence for this in the behavior of the stock market. In this study, we examine the returns on the market over the Democratic and Republican terms in office from 1871 to 1997. We find, contrary to earlier belief, that there is no support for returns being different under one political party versus the other. The old adage that the market prefers Republicans is not evidenced. On the contrary, the evidence indicates a slightly, but not statistically significant, higher returns during Democratic administrations.