Many on Wall Street--and on Main Street, for that matter--believe the stock market prefers a Republican president. Oddly enough, however,
the S&P 500® Index has posted better returns when a Democrat has held the office than a Republican. Since 1929, the S&P 500® has gained an
average of 10.1% during each year of a Democratic administration, yet only 3.8% during Republicans' years in office.
Even excluding the Great Depression, Democrats hold the edge. Since 1945, the "500" has risen 10.7% on average each year under Democrats and 7.6% under Republicans
One reason could be that economic recessions have occurred more frequently during Republican administrations than Democrats'. Since June 1899, there have been 22 recessions--15 (two out of three) beginning while a Republican was president. As the table ablove indicates, when the four-year presidential cycle is broken apart we find the early years to be more challenging than the latter years, particularly for Republicans. Again, this pattern could be the result of recessions coming early in different administrations. I will leave it up to the reader to decide if that is the result of inheriting a predecessor's problems or the new president's own mismanagement.
Should investors infer from this that, statistically speaking, they would be better off under a John Kerry presidency than a second term with President Bush? Or even that the market might soar next year should Kerry be elected? Not necessarily. Even though investors may all too clearly remember the 13% decline suffered by the S&P 500 during President Bush's ("43") first year in office, they may have forgotten that the Index also slumped 11.5% during Jimmy Carter's inaugural year.
More...
http://myfidelity.members.fidelity.com/investorsWeekly/enewsfa.jhtml?pageName=LFEAen0410&service=CREM (there are two statistic images, check these out)