Study: Even investment strategies are affected by partisanship

For example, when Democrats controlled the White House and Congress, Professor Kumar wrote in an e-mail message, “investors in highly Republican counties had a 9 percent larger foreign stake in their stock portfolio than investors in highly Democratic counties.” Just the opposite was the case for Democratic investors when the Republicans were in control.

A similar pattern was evident in holdings of risky stocks, as measured by beta, a standard gauge of portfolio risk (the higher a stock’s beta, the greater its price tends to swing). The research found that when investors’ preferred party was in power, their portfolios’ average beta was 1.3 percent higher than that of investors of the other party.