A Secret Edge for Obama in Battleground States
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The Fiscal Times
November 6, 2012

Election Day is all about Red States versus Blue States. Jack Ablin, the chief investment officer at BMO Private Bank, took that color-coded view of the world and applied it to the stock market.

Ablin looked at the long-term stock market returns of companies that are based in, or have a significant business presence in conservative and liberal states. He found that, since 1995, red-state stocks have beaten blue-state ones by 0.1 percent. But since President Obama took office, blue states have had a decided edge of about 6 percentage points a year. That advantage is due largely to California companies (like, say, Apple), which have rocketed more than 23 percent a year, well ahead of the 12 percent annual gains posted by the S&P 500.

Ablin also suggests another possible advantage for Obama: The market gains for companies in the nine swing states that will decide the election – Colorado, Florida, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Wisconsin and Virginia – have all outpaced the S&P 500 over the last four years (see chart below).

“If stock market returns influence elections,” Ablin writes, “Obama will be helped.”

Executive Editor Yuval Rosenberg oversees coverage of business, the economy, technology and Wall Street. A former web editor at WNYC, Fortune and Newsweek, he also writes on a wide range of subjects.