Market Ups and Downs and Politics

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Financial consultant Bob Coffin of A.G. Edwards in Meridian says he has witnessed the effects of a few presidential elections on the stock market in his 19 years in the business.

"In the short run, the market would most likely react positively if Bush were reelected and negatively if Kerry were to win the White House," said Coffin.

Coffin added that although ultimately the market can deal with whoever is elected president, in such a close race the uncertainty of who will actually be in the White House making policy has the stock market a bit uneasy.

In other words, the market already knows George W. Bush. Sen. John Kerry would be uncertain simply because it would be a new administration.

Interestingly, Coffin says of the 26 presidential elections since 1900, the direction of the Dow Industrials between the close of the last presidential convention and Election Day has indicated the winner 21 times.

Coffin says when the stock market rises in value, the incumbent has won and when the stock market declines, the challenger has won.