While most professional fund managers fail to consistently beat the market, one institution has proven it’s capable of outpacing the benchmark S&P 500 index: Congress.
Quiver Quantitative, a platform that aggregates alternative stock data from across the internet, reports that members of Congress routinely execute trades that outperform the market.
Rep. Nancy Pelosi, D-Calif., for example, has seen her various positions in chipmaker Nvidia return an average of 586.56% since 2021, Quiver Quantitative data shows. Pelosi, whose net worth is estimated at around $250 million, conducted trades totaling $123.98 million in volume last year, with 24 transactions of $1 million or more dating back to 2017.
Sen. Tommy Tuberville, R-Ala., last year’s most active trader on the Republican side of the aisle, had his Nvidia trades return 605.87% since 2021. Over the past year, Rep. Daniel Meuser, R-Pa., saw his portfolio gain 104.42%, while Sen. Rick Scott, R-Fla., whose net worth is estimated at over $325 million, conducted trades accounting for nearly $219 million over the same time.
Meanwhile, it’s gotten easier for average Americans to potentially profit like politicians thanks to two exchange-traded funds that mirror the stock trading done by members of each party of Congress.
Should Congress be banned from trading stocks?
The main reason we know about Congress’s stock trading habits is the Stop Trading on Congressional Knowledge (STOCK) Act, which became law in 2012. The STOCK Act’s principal aim was to address perceived conflicts of interest for representatives, senators and other federal government personnel who have access to privileged information and could potentially use that knowledge to buy and sell stocks.
The STOCK Act stops short of precluding members of Congress from participating in the market. Instead, the law requires them to file disclosure forms within 45 days of a transaction with a value exceeding $1,000.
But the vast majority of Americans across the political spectrum think this law doesn’t go far enough. A 2023 survey conducted by the University of Maryland’s School of Public Policy found that over 80% of Republicans, Democrats and independents support a full ban on trading for members of the House and Senate, as well as the president, vice president and Supreme Court justices.
Rep. Abigail Spanberger, D-Va., is one member of Congress who agrees a stock trading ban is needed. “People have such a distrust for Congress,” Spanberger says. “Anything we can do to just affirm a bit more that we should be trustworthy or we’re making decisions on behalf of and for the American people, and anything we can do to negate that perception of impropriety is really valuable and worth doing.”
In January 2023, Spanberger sponsored H.R. 345, the Transparent Representation Upholding Service and Trust in Congress Act, or simply the TRUST in Congress Act, which has the central aim of banning members of Congress from trading individual stocks — a move she says “transcends partisanship and transcends ideology.” The bill requires congresspeople, their spouses and their dependent children to place certain assets (i.e., shares of individual stocks) into blind trusts, where they must remain for 180 days after they cease to be members of Congress.
“I don’t think there are massive numbers of people in Congress who are attending meetings and leaving saying, ‘Now I’m going to trade stocks and make money off this,'” she says. Yet, given the access that politicians have to prospective legislation and business deals, the potential for abuse is great. “We’re just exposed to so much information. Whether you realize it or not, you end up having special information.”
The congresswoman notes that there are instances when elected officials’ trades, raise eyebrows, as was well-documented during the first weeks of the pandemic. “There are obvious cases, like when we were having classified briefings in the early days of COVID, and then people are going and buying Clorox stock. That I find deeply offensive,” she says. “Some [instances of congressional stock trading] are sort of egregious.”
Former Sen. Kelly Loeffler, R-Ga., and her husband Jeffrey C. Sprecher, founder and CEO of Intercontinental Exchange and chairman of the New York Stock Exchange, were criticized for selling upwards of $20 million in stocks via 27 transactions beginning on Jan. 24, 2020, the day she attended a Senate briefing on the looming COVID-19 pandemic.
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
This article originally appeared here and was republished with permission.
