Members of Congress tend to secure higher returns from the average of their stock market investments. It is easy to determine the root of this phenomenon – legislators have a general media advantage, in addition to more specifically due to the tasks of their committee.
At the same time, the rules and regulations that govern this practice are somewhat lenient, while the sanctions on non -compliance are trivial. It was not surprising that trading in Congress became a famous and controversial topic.
Many investors have taken the circulation of copies of their representatives or members of the Senate-but the recent results indicate that some transformations, such as the latest shrinkage in the market, even blinded talented traders in Capitol Hill.
Market intelligence platform Retal quantity It was one of the vanguard to make political deals more general, traceable, and in the end, it can be implemented from the perspective of retail investors. According to their data, February was a very red month for Congress shares traders.
Is it time to strike to stop trading congressional copies?
In February, members of Congress lost a total of $ 71 million in the stock market, for each a March 18 after Before Reflux On the social media platform x.
However, placing things in the appropriate context is very important. This number – $ 70 million, is imposed – but you may be shocked when we look at it from another perspective.
As it becomes clear from the image above, the losses that reach hundreds of thousands, if not millions of dollars, are usually equivalent to nearly half a percentage point when it comes to a loss in the value of the portfolio. If there is anything, this is only a reminder of the overlapping aspect of the trading of Congress shares.
The above numbers refer to the daily losses in Congress – at the time of writing this report, the S&P 500 was 1.19 % decreased on the daily chart, indicating that a wide range of politicians suffered smaller losses compared to the average retail trader.
So, are we dealing with the position “The only profit is not playing”? Not at all – for anyone, anyone who was investing for a long time will tell you that withdrawals are an unfortunate reality in life. Second, American politicians continue to make a large number of suspicious deals – some of which are completely profitable even in the midst of the current shrinkage.
While these recent developments may make direct copies trading a less attractive strategy, close follow -up of Congress deals (but practicing a greater degree of due care) remains a wise path of work.
Distinctive image via Shutterstock
