While going through some old files, I came across a great paper by Michael Furguson, from the Department of Finance at the University of Cincinnati, and H. Douglas Witte, from the University of Missouri, discussing the effect Congress can have on the stock market. They found that the “Congressional Effect” produces more the 90% of the capital gains over the life of the Dow Jones Industrial Average (DJIA) when Congress is OUT of session.
A timely read as we are seeing increased day to day volatility in the stock market as Congress debates the debt ceiling.
Here is a link to their research paper:
Congress and The Stock Market
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