The media this week is all over President Obama for daring to take a vacation this summer.  Similarly, Congress is killing time (literally) until their scheduled "district work period" which will last from the beginning of August to the middle of September.

Some are accusing Congress of inactivity.  But isn't that a good thing?

Intuitively, conservatives believe that.  George Will famously said that his favorite phrase in the English language is "Congress shall make no law."  A similar axiom is that "the nation which governs best, governs least."

But there may be more to this than mere theory.

There's a mutual fund that has been around a few years now which invests according to this philosophy.  Called the "Congressional Effects Fund"  (CEFFX), this mutual fund invests all of its assets in the broad stock market (S&P 500 index) when Congress is out of session, and keeps all of its assets in cash equivalents when it's in session.

What are the results?

The average rate of return on the stock market generally has been about 10 percent per year for as long as they've been keeping data.  But the Congressional Effect Fund's market-timing results in an annualized rate of return of over 16 percent when Congress is home if applied backwards to 1965.  In other words, when Congress is out of session, the stock market returns 60 percent higher than the year in general.

What about when Congress is in session?  The annualized rate of return in that world is only 1 percent.  In other words, the stock market under-performs its average by 90 percent when Congress is in session.

This sixteen-fold difference in the rate of return on stocks when Congress is in session and out of session is striking.  It shows that the uncertainty new taxes, spending, regulations, and general harassment of business brings is unwelcome to investor stomachs.

If you want to boost America's nest egg, there's a simple way to do it: send Congress home.