Does party in power impact returns?

For years, finance researchers in academia have suggested that it doesn't matter which political party holds the White House. Despite the popular view of Democrats as free-spending inflationists and Republicans as cold-hearted fiscal conservatives, study after study has shown that there is no meaningful difference in investment returns no matter who is in power.

But now it appears that the researchers have just been looking at the wrong numbers, says Forbes (60 Fifth Ave., New York, NY 10011; $59.95 annually).

"While it's true that the S&P 500 stock index performs pretty much the same no matter who's president, there are important differences when it comes …