New Delhi, May 25 -- Political polarization is dangerous to your wealth. And overcoming it is a lot more difficult than previously thought, according to a new study.

Assuming you're like almost all other investors, you become too pessimistic about the economy and the stock market when the presidency is held by someone whose political party is the opposite of yours. As a result, you invest less in stocks than when your political party occupies the White House-with significant consequences to your portfolio.

Consider the huge difference between Democratic and Republican investors' views of the current economy under President Donald Trump, as measured by the University of Michigan's Index of Consumer Sentiment. Among Republicans this index...