Via Roberta X I read an interesting article about the effects of Congress upon the financial markets.

You could have invested only when Congress is on vacation. It may sound a little crazy, but I am totally serious. When Congress works – and by “works” I mean “meddles” – it destroys wealth. When Congress doesn’t work, wealth grows by itself.

From 1965 through 2008, looking at a total of 11,000 trading days, the annualized daily price gain of the S&P 500 Index is just 0.31 percent when Congress is in session. Out of session, that figure jumps to 16.15 percent, a daily difference of 50 times.

As government power and influence grow, the trend has intensified in recent years. From 2000 through 2008, in-session performance of the S&P is –12.4 percent. The out-of-session performance: +8.8 percent.

In other words, had you invested $10,000 only when Congress was in session from the beginning of 2000 through 2008, putting aside dividends, you’d have $4,615 today. Had you invested that same $10,000 only on days when Congress was on vacation, you’d have $13,416 today.

The article continues with an excellent baseball analogy, then goes to list many recent things Congress has done that meddle in the markets. Truly an eye-opening read, that is, if your eyes weren’t already open.

One thing to note is it matters not who is in power: Republicans or Democrats. They’re both meddlers, they both seek to grow Government, they both spend as much of your and my money as they possibly can. Constitutional limits matter not when there’s contracts and favors and pet projects to manage! The money just flows… they spend it faster than they can take it from us or print it up.

I’m not saying one way or the other that you should invest or not in The Congressional Effect Fund… what you do with your money is your business and not mine. But it’s a damn sight interesting, that’s for sure.