Congressional Portfolios, Outpacing the Market - Essay - NYTimes.com
The study, “Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives,” is a real eye-opener. Using the financial disclosures of politicians, the research team built model portfolios and charted their performance. They found that House members “earn statistically significant positive abnormal returns,” outperforming the market by 6 percentage points.
Senators do even better, the authors say, citing their own earlier research from 2004. Senate portfolios “show some of the highest excess returns ever recorded over a long period of time, significantly outperforming even hedge fund managers,” with gains that are “both economically large and statistically significant.”
They beat the market, my friends, by 10 percentage points a year.
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