It's clear that many things will be affected by who wins the presidential election in 2004. The environment, education, taxes, and so on -- their futures are all hanging on a few chads. You may not have thought about it, but your portfolio also stands to benefit depending on who wins (though to some degree, we all might win in the short run, as stocks tend to do well during election years).
CBS MarketWatch recently summarized (free registration required) the findings of a Merrill Lynch
- Oil and gas companies such as Halliburton
(NYSE:HAL)and ExxonMobil (NYSE:XOM)have fared better over the past six decades under a Democratic administration.
- Computer hardware companies, such as Dell
(NASDAQ:DELL), Hewlett-Packard (NYSE:HPQ), IBM (NYSE:IBM), and Apple (NASDAQ:AAPL)also do well with Democrats.
- Tobacco enterprises such as Altria
(NYSE:MO)and R. J. Reynolds (NYSE:RJR)are more likely to turn in smoking performances under Republican leadership.
- Truckers, retailers, and large food companies -- such as Kraft
(NYSE:KFT)and Wal-Mart (NYSE:WMT)-- also do well with Republican administrations.
Overall, since 1943, stocks have performed better as a group under Democratic rather than Republican leadership (advancing an annual average of 13.6% with Democrats vs. 11.7% with Republicans). Bonds fare better with Republicans.
In an Atlanta Journal-Constitutionarticle, economist Dorsey Farr dismissed the idea of investing according to who's in office, noting that "...from a purely statistical point of view, there aren't enough data points for a meaningful analysis." He added, "If you're trying to think about what might happen, it would be better to look at the policies being advocated by the candidates."
Merrill Lynch chief strategist Richard Bernstein offered some Foolish advice: "Remember, 91% of investors who employed a long-term asset allocation strategy had better performances than those that timed the market or picked specific stocks to invest in." Amen.
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Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.