Equity returns in post-election years; as measured by the S&P
500, the Ibbotson small cap index (S/C, as defined below) and
the Nasdaq (since it’s inception in 1971).
……………..S&P……S/C……..N…
2001 (R) …..-11.9…..+22.8……-21.1
1997 (D) …..+33.4…..+22.8…..+21.6
1993 (D) …..+10.0…..+21.0…..+14.7
1989 (R) …..+31.5…..+10.2…..+19.3
1985 (R) …..+32.2…..+24.7…..+31.4
1981 (R) ……-4.9…..+13.9……-3.2
1977 (D) ……-7.2…..+25.4……+7.3
1973 (R) …..-14.7…..-30.9……-31.1
1969 (R) ……-8.5…..-25.1
1965 (D) …..+12.5….+41.8
1961 (D) …..+26.9….+32.1
1957 (R) …..-10.8…..-14.6
1953 (R) ……-1.0…….-6.5
1949 (D) …..+18.8…..+19.8
1945 (D) …..+36.4…..+73.6
1941 (D) …..-11.6…….-9.0
1937 (D) …..-35.0…..-58.0
1933 (D) …..+54.0…+142.9
1929 (R) ……-8.4…..-51.4
Notes:
–In calculating small cap returns, Ibbotson Associates has
employed various indices since 1926; namely the fifth
capitalization quintile of stocks on the New York Stock
Exchange for 1926-81, Dimensional Fund Advisors’ Small
Company Fund, 1982-2001, and, since April 2001, the DFA
Micro Cap Fund.
–The small cap return figures for 1997 and 2001 were indeed
exactly the same, +22.8.
But concerning 2001, yes, the small cap return for this year may
seem strange when weighed against the performance of large
caps, as represented by the S&P and Nasdaq. Remember the
environment back then…the big names that had all the volume in
1998-2000 were being sold with a vengeance. The smaller
stocks, such as defined above, obviously held up better.
Nonetheless, I went through the numbers with a fine tooth comb
to convince myself.
For example, here are the returns for just two months in 2001.
January…S/C +13.8…S&P +3.6…Nasdaq +12.2
May…….S/C +9.6….S&P +0.7…Nasdaq -0.3
[Using one other month, 2/01, the Nasdaq was off 22.4% while
the Ibbotson small cap index was off 7%]
–One other note, the 142.9% return figure for small caps in 1933
is not a typo.
Sources:
Ibbotson Associates 2004 Yearbook
Stock Trader’s Almanac / 2005
Wall Street History will return 11/19.
Brian Trumbore
