From “Fortune” Magazine
FORTUNE — One of the questions I get asked these days is whether a win by Mitt Romney or by Barack Obama would be better for the stock market. To which the only honest answer is “I have no earthly idea.”
Case in point: George W. Bush. He was a Republican, a free-market guy, right? Stocks, according to the conventional wisdom, should have boomed during his reign. After all, he dropped taxes on investment income to their lowest point in modern history in the name of helping investors and the economy. Well … oops! Rather than being a golden age for stock investors, his tenure was a disaster. The U.S. market lost 25.1% during his two terms, according to statistics assembled for me by Wilshire Associates. Had historical averages held, the market’s total return — capital gains plus reinvested dividends — would have more than doubled investors’ money during the eight years that Bush was in office. Instead, investors ended up with a quarter less than they started with.
MORE: Obama – president ready for a showdown
And guess what? The best first-term presidential market (at least so far) has come during the administration of … Barack Obama, who has been reviled on Wall Street for allegedly crippling corporate America with insults and regulation, and who has pushed through higher taxes on investment income of upper-echelon households. Yet stocks produced a whopping 95.9% total return from Obama’s Inauguration through Fortune’s mid-September presstime.
About This Author
Senior Editor at Large, Fortune
Allan Sloan, who has been writing about business for more than 40 years, joined Fortune in July of 2007. Before that, he was the Wall Street editor for Newsweek for 12 years. His work also appears in The Washington Post. Allan is a seven-time winner of the Loeb Award, business journalism’s highest honor, receiving awards in four different categories for five different employers. He is a graduate of Brooklyn College and has a master’s degree in journalism from Columbia University. He and his wife live in New Jersey. They have three grown children.