Comment 11.8.10

The Mark and Jason Group Weekly Market Update Week of November 08, 2010 THE MARKETS: Republicans have seized control of the House and increased their presence in the Senate. How will this shift in power affect investors? We can only speculate. Thankfully, we aren’t completely in the dark when speculating, as history provides some clues. While we cannot possibly discuss the potential impact on every type of investment in this brief commentary, let’s focus on two; stocks and bonds. STOCKS: It is commonly held that Republicans are “business friendly”, and thus good for the stock market when they are the controlling party, but there is no solid data to back this up. Additionally, stock returns in years when power is split between the White House and Congress show no clear pattern. Some historical averages however, are interesting to note. Since 1945, the Standard and Poor's 500 index has gained 4% in years when Congress was split between parties, 8% when Congress was controlled by one party but the White House another, and 11% when a single party was in control of 1Washington. Also noteworthy though, is an observation made by the Wall Street Journal while commenting on the future of the stock market in light of recent election results: “Watch out for anyone who tells you "divided government is good for the stock market. The historical basis for this – such as data since 1949 via the Stock Trader's Almanac – Is meager. You can't extrapolate universal ...