Where Millionaire Senators and Representatives Invest their Money
So I guess we are talking about politicians and their investments.
The Neighborhood Finance Guy writes about financial literacy topics: Financial Planning, Budgeting, Millennial Money Management, Investment Strategies, Retirement tips, and more. The goal is to help you make effective decisions and set S.M.A.R.T goals with your money. The information is free but the struggle is not sold separately. And, if you are into this sort of thing; the blog is PLUTUS nominated, I studied Accounting with a Specialization in Taxation, served in the US Marine Corps, and now work as an Auditor. I’m also big on Traveling and watching Anime.
Table of Contents
Summary of why you should invest like a Politician:
- The stock market is up over +20% in 2021. As of November 12, 2021, the market is up over 100% since the low point in March 2020.
- Out of the 433 members of Congress that have reported their financial information publicly, over half of them are millionaires. Over 50 members of Congress have a net worth of $10 million.
- A 2011 “60 Minutes” expose showed how US senators and Representatives likely profited due to receiving insider information prior to the 2008 housing market crash. As such, new legislation was adopted. Stop Trading on Congressional Knowledge (STOCK) Act was passed in 2012. However, exact investment data has since been excluded.
- If you are interested in following how Congress is investing, you can find more information at the Center for Responsive Politics. However, I’m still not sure where they are getting this data from.
- As of today, Congress seems bullish on Energy and Tech stocks based on their performance. $XOM is up 54.19% as of 11.12.21. $APPL and $MSFT both have gained over 400% in the last five years. Additionally, they are heavy in Banking and Energy. Time will tell if we see a major shift toward infrastructure stocks from 2022 to 2030.
Introduction to TNFG Investment Shorts: Creating a Politicians’ M1 Pie
First things first, this should not be interpreted as investment advice. This is a blog post that I’m creating for fun and to help me contextualize how to deconstruct financial articles that I read online.
If you need financial or investment assistance, I would recommend that you refer to a fee-only financial advisor who has a fiduciary responsibility to their clients. Since investments can trigger taxes, you might want to refer to a Certified public accountant as well. And if you don’t have a lot of money, just start with a financial plan.
No need to play with your wealth, especially since too many Americans are retiring broke. Additionally, this is not party affiliated since I tend to be objective about what I see.
To me, this is all about how investment portfolios hold up. However, this one does have a slight political spin.
My Political Goals for this Short? Sort of…
My goal with these shorts is to go through my process when I read an article about investing online.
I typically set out to create a portfolio based on what was discussed using M1 Finance’s create a pie feature.
From that point, we get to see how it plays out. This pie is a snapshot as of early November 12, 2021. Keep in mind that the one-year return for the same period in the S&P was 32.37%.
Still better than 0.01% in a savings account getting shredded by inflation north of +4% this year.
So what are the top holdings based on the US politicians in congress?
Based on the weight of the distribution, these are the top 10 holdings (see table #1 and table #2). Data is compiled and shared publicly by the Center for Responsive Politics.
Note that this blog post is not meant to be some exhaustive research with tons of supporting documents. I’m just going with the numbers, engineering magical math assumptions, and constructing a portfolio on M1 to see if we can create something to track and analyze going forward.
It’s a theory. But I think I got the gist of it, with some fancy math.
Table 1. Politicians’ Holdings and Average Investments
| Company | Total Investors | Minimum Investment | Maximum Investment | Average |
| Exxon Mobil | 45 | $6,688,238 | $23,178,183 | $14,933,211 |
| Apple Inc | 79 | $9,654,688 | $38,853,590 | $24,254,139 |
| Microsoft Corp | 66 | $6,777,342 | $23,462,249 | $15,119,796 |
| Pfizer Inc | 47 | $2,630,444 | $8,206,395 | $5,418,420 |
| Alphabet Inc | 45 | $2,656,348 | $6,543,273 | $4,599,811 |
| Walt Disney Co | 52 | $2,124,962 | $8,104,907 | $5,114,935 |
| Johnson & Johnson | 47 | $2,545,111 | $4,688,062 | $3,616,587 |
| Bank of America | 59 | $2,146,215 | $5,659,133 | $3,902,674 |
| AT&T Inc | 49 | $1,222,407 | $2,821,355 | $2,021,881 |
| General Electric | 47 | $647,604 | $1,390,563 | $1,019,084 |
| 53.6 | $37,093,359 | $122,907,710 | $80,000,535 |
Table 2. Calculating Percentage and Allocations for the M1 Pie
| Ticker Symbol | Average | *Average per US Congress Member | Percentage of the Portfolio |
| $XOM | $14,933,211 | $331,849.12 | 24% |
| $AAPL | $24,254,139 | $307,014.42 | 22% |
| $MSFT | $15,119,796 | $229,087.81 | 16% |
| $PFE | $5,418,420 | $115,285.52 | 8% |
| $GOOGL | $4,599,811 | $102,218.01 | 7% |
| $DIS | $5,114,935 | $98,364.13 | 7% |
| $JNJ | $3,616,587 | $76,948.65 | 6% |
| $BAC | $3,902,674 | $66,147.02 | 5% |
| $T | $2,021,881 | $41,262.88 | 3% |
| $GE | $1,019,084 | $21,682.63 | 2% |
US Politicians’ Top Ten Out Performs the S&P!
After plugging in the numbers in M1, we can see this portfolio isn’t doing so shabby (see graphics #3). Over 45% rate or return on your investment from November 2020-2021.
It more than holds up against the S&P 500 for the same period (at 32.37%). The Vanguard total stock index $VTI maxed at 33.66% for the same timeline. I guess Congress only really agrees when it comes to making money.
If you want to follow this pie, click here. It’s a link to my M1 pie. This is yet another reason why I love investing with M1 since we can easily share these portfolios with each other.
If you want the $30-for-30 referral, click here.
Final Thoughts
Just like a Congressional Senator or Representative, you are free to buy and sell stocks. As price inflation and income stagnation hit, investing your money is the best way to go.
Some are betting heavily in the tech and healthcare sectors, as the US population ages. Only time will tell. At some point, we will all have to think differently about investing for the future. No matter where you align politically, just know that this game is really about money.
Turns out 2040 will be way more expensive than 2020. Invest to hit your million-dollar mark and then sum. I dished out my Million plus retirement strategy.
Feel free to read up on it here.
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