Is a Democratic President good or bad for stocks?

Pundits love to pontificate about which political party in the White House is best for Wall Street. If you ask the average voter, they most likely will say a Republican President is best, because that party is considered more “pro-business” in its ideology.
It is true that republicans are more prone to lower corporate taxes and push for less government regulation. But history dictates the Dow Jones Industrials have posted bigger average returns under Democratic Presidents, according to The Stock Trader’s Almanac.
Adding to the optimism, Jeffrey Kleintop, chief strategist for LPL Financial, is quoted in USA Today as saying “stocks tend to perform better in periods of legislative gridlock, when Presidential power is offset by the opposition party controlling Congress.” While democrats do control Congress, they do not have a filibuster proof 60 vote majority in the U-S Senate. So a case can be made that there will be some gridlock.
But I believe such predictions backed by historical research may be just a lot of wishful thinking this time around. A democratic President Obama will inherit one of the country’s worst economic downturns since fellow democrat Franklin Roosevelt became President during the Great Depression. It will take a lot more than a rally on Wall Street to cure the economic ills infecting Main Street.

(Brian Banmiller is a national Business Correspondent for CBS News Radio, free lance writer and public speaker. The former television business news anchor in San Francisco can be reached at brian@banmilleronbusiness.com .)