Many investors are waiting to see how a reshuffled Congress will affect our nation's economy after the November elections: Will a Republican-controlled Congress renew the Bush tax cuts? If the Democrats stay in charge, will there be another stimulus package? What will happen to the estate tax?
No matter who's in charge, it appears that the markets are not too fond of Congress. A 2006 study looked at the gains in the Dow Jones average when Congress was and wasn't in session, and found that more than 90 percent of the index's gains came on days when Congress was not meeting.
That's not to say that the economy is at its strongest when Congress accomplishes the least. According to the New York Times, since 1926, a large-cap stock index returned about 7 percent a year at those times when the federal government was gridlocked - that is, the same party was not in control of both branches of Congress and the White House. But when the government wasn't gridlocked, that same index returned 12 percent a year.
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