Vote for Gridlock

News flash: The Dow likes Democrats too, but it loves a government split between two parties

The relationship between politics and the stock market is overvalued. Peace, low mortgage rates, affordable gas and, yes, Alan Greenspan are way more important to investors than which party is in power. Yet every four years, after the Dems and the G.O.P. stake out the policy battleground at their national conventions, wags start in on how the market would fare under each candidate. Fun sport. But the Clinton years in particular stand much received wisdom on its head.

Republicans are supposed to be the probusiness party. Yet since 1913 the Dow, excluding dividends, has risen an average of 7.4% annually under...

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