Abstract

Pension funds typically suggest the 60-40 stock-bond rule to lower risk as during stock market declines bonds tend to rise. However, US investment returns have been presidential party dependent; and returns in the last two years of all administrations exceed those in the first two years. The strategies small cap stocks with Democrats and intermediate bonds or large cap stocks with Republicans yields final wealth about six times the large cap index, 50% more than small caps and more than twenty times the 60-40 mix since 1942.

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