Kee argues that a better indicator of the direction of the market is who controls Congress. "When you have a Republican Congress, you have a very strong stock market in the following year and subsequent years … mainly because Republicans are opposed to taxing dividends and capital gains," Kee says. "If Democrats win, you can bet there will be [talk of an] increase" in these taxes.
However, he cautions against using politics as an investment indicator. "This sort of analysis never pans out completely post-election. The markets never behave in a way that cab be obviously suggested," he says. "I don't think it's knowable. I don't think any of the models are good enough to tell you what the market's expecting."
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