Presidential scandals may grab headlines but they draw a big yawn from the stock market, according to a report by Mark Stumpp, CIO of PDI Strategies. Mr. Stumpp studied the average monthly return of the S&P 500 during several of America's most famous presidential scandals, from the Eisenhower era through the Reagan administration, including Watergate and Iran-contra.
``The trouble with scandals is that they generally take a long -sometimes, a very long - time to play out, which makes it difficult to assess their impact on stock prices,'' Mr. Stumpp said.
Mr. Stumpp said stocks took their only serious hits during the final months of the Nixon administration, a period that also coincided with the first Arab oil embargo. His bottom line: Investors are well advised to keep an eye on fundamentals and not on Washington.