Can Equity Investors Profit from Elections?
"Can Equity Investors Profit from Elections?," The Journal of Investing Spring 2002, 11 (1) 27-36; DOI:10.3905/joi.2002.319492
Posted: 19 Jun 2019
Date Written: 2002
Indications that suggest equity investors can profit from elections are problematic for three reasons. First, the research assumes that political variables alone determine stock market performance. Therefore, this article controls for other factors, namely, total and systematic risk. Second, given the limited usefulness of temporal variance for practitioners, this study examines international data and thus broadens the potentially applicable findings. Third, the research provides minimal theory regarding “significant” relations; this article modifies the hypotheses to incorporate rational expectations. All in all, both evidence and theory regarding political effects are ambiguous.
Suggested Citation: Suggested Citation