NYSE Sector Returns and Political Cycles.

POLITICAL parties; STOCK prices; RATE of return; POLITICAL affiliation; UNITED States politics & government; STOCK price indexes; NEW York Stock Exchange; INVESTMENT analysis; STOCKHOLDERS equity; POLITICAL economic analysis; ECONOMICS; ACCOUNTING

We address three issues regarding the relationship between political party affiliation and returns in the equities markets, as measured by the NYSE Composite Index and its sub-indexes. First, we find a tendency for returns to be greater during Democratic presidential administrations; however, this result is statistically insignificant. Second, we conclude that returns during the last two years of presidential administrations are greater than during the first two years. Third, we examine the relationship between the majority party in each house of Congress and equity returns. We raise the possibility that party affiliation of Congress is a factor in explaining returns. [ABSTRACT FROM AUTHOR]

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