US legislators appear to be rather shrewd stock pickers.
Congressional equity portfolios outperformed the wider market by an average of 55 basis points per month from 1985 to 2001, according to research cited by the Washington Post.
From Monday’s Post:
After examining trading data contained in financial disclosure forms from 1985 to 2001, the researchers found that congressional portfolios have regularly outperformed those of average Americans over the years. The report said a “portfolio that mimics the purchases of House members beats the market by 55 basis points per month.”
The researchers, whose findings were presented at a congressional hearing in July, said the statistics suggest that those unusual returns must be based on lawmakers’ access to “government and important social contacts.”
“No one else has this kind of success, not even mutual fund or hedge fund managers,” said Georgia State University professor Alan J. Ziobrowski, one of the researchers. “It’s no accident.”
All of which begs the question, what is the source of this Congressional alpha?
(H/T: MTM in the Long Room)
Related links:
Policy, portfolios and the investor lawmaker – Washington Post