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Published: August 6, 2009
We all know that Congress is only too happy to
"invest" our money. But how are they when it comes to managing
their own?
Not so great, as it turns out.
A review of the personal financial disclosures filed by members
of the U.S. Senate and House of Representatives gives some
insight into just how bad these politicians are at managing
money.
The table below shows the 15 most popular stocks held by members
of Congress, with the number of owners to the right:
If $1,000 had been invested in each of the 15
most popular stocks held by Congress on Jan. 1, 2008, the entire
portfolio would be worth $10,148 today, a loss of -32.3%. This
exceeds the total loss of the S&P 500 index, which has fallen
-31.7% in the same period. In fact, only one of the companies,
IBM, has shown a positive return, though nine companies posted
smaller losses than the benchmark, losses that could have been
made smaller still with reinvested dividends.
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As you can imagine, the Democrats
and Republicans weren't in agreement
on many companies. Just two, in
fact, out of the 50 most common
holdings, had equal bipartisan
support: Warren Buffett's Berkshire
Hathaway (NYSE: BRK-A) and Microsoft
(Nasdaq: MSFT).President Obama has taken some
criticism that he leaves too many
details to Congress. But he's not
about to follow their investment
lead. A large percentage of the
president's wealth, which was
disclosed in May soon after he made
his tax return public, is in cash
and U.S. Treasuries. His only
exposure to the stock market is
mutual funds held in retirement
accounts. Unfortunately, though Mr.
Obama did protect his portfolio from
losses, this is one domestic program
that he can't take credit for. His
assets are held in a blind trust.
The top 10 richest members of
Congress, however, don't have large
stock holdings, as least not
relative to their overall wealth.
Most have taken steps to ensure
their fortunes are well diversified,
though some, like Herb Kohl, have
most of their wealth in one asset.
Kohl owns the Milwaukee Bucks. Sen.
Ted Kennedy of Massachusetts
inherited his wealth from his
father, Joe, which is mostly wrapped
up in trusts. And most people are
probably familiar with the
Rockefeller fortune. (Oysters,
wasn't it?)
| The richest member of Congress, Rep.
Jane Harman of California, owns
Harman International, an electronics
company. Her major holdings include
municipal bonds, which help her
avoid taxes, government bond funds,
which limit risk, and hedge funds,
which pursue it. Her largest stock
holding appears to be Apple (Nasdaq:
AAPL). The poorest member of
Congress was Alcee Hastings of Florida, who had less
than $15,000 in assets -- his checking account -- but
who owed $7.4 million. How can you owe that much |
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| and have no assets to show for it? It's a common
problem on Capitol Hill: Legal fees. |
-- Andy Obermueller
Editor
Government-Driven Investing |
