Back in April, I put some money into a couple of unusual funds. NANC, which follows the trades of top Democrats, and GOP, which does the same for Republicans. I also parked some cash in a plain vanilla Schwab dividend fund for comparison. The results? Since April, NANC is up nearly 32%, GOP is up 27%. Meanwhile my baseline Schwab dividend fund has crawled along at just 4% in the same period. That is not luck. That is insider advantage.
These funds exist because politicians are required to disclose their trades, but the disclosures are not there to help you or me. They are there to check a compliance box. The fact that a whole business model can be built around mirroring these trades tells you everything you need to know about where the real money is. They make the laws, they regulate the industries, and they still get to play the same casino as the rest of us, except they already know what cards are coming. If a CEO did this with his own company's stock, the SEC would call it insider trading. When members of Congress do it, we call it Tuesday.
This is not a Republican problem or a Democrat problem. It is a politician problem. It is a US politics problem. Both sides are playing the same game, and both are winning at it while the rest of us pick from the scraps. Add to this the fact that we are starting October with a government shutdown and you see the absurdity more clearly. Regular Americans wonder if they will get their paychecks, but members of Congress keep theirs, padded with trading income that makes their base salary look like a tip.
So what is the solution? It is not another round of angry tweets or empty hearings. The solution is structural: get money out of politics. Publicly financed campaigns. End unlimited contributions. Stop letting billionaires buy elections. Stop treating corporations as people. Close the revolving door between Congress and K Street. Ban Congress and their families from trading individual stocks. (1)
Do we want a government that serves the people, or do we just want politicians like Eddie Murphy's character Jeff Johnson in The Distinguished Gentleman who only cared about feathering his own nest? Hopefully our leaders can find a backbone the way he finally did by the end of the movie and stand up to the corruption around them. (2)
(1) If they're allowed to put any money in the market at all, it should be broad index funds so they get the same performance out of Wall St. that everyone else does.
(2) One of my favorite movies, BTW. "Dick is good! Dick is good!"
P.S. My only regret at this point is not putting more than just a small test sum in those two funds. Guess I should have listened to Congress.
I don't know where you got the "4% general market growth," unless you looked only at bonds. I invest in S&P 500 (SPX), and it has grown 14% YTD, which is in line with the 16% YTD growth for NANC and GOP. Also, international stocks has outperformed US stocks in 2025, so the politicians probably have those in their portfolios too. I invest in three international stocks. VEMAX (Vanguard Emerging Markets Stock) has grown 22% YTD; VFWAX (Vanguard FTSE) is +25% YTD, and VTMGX (Vanguard Developed Markets Stock) is +26% YTD. A portfolio that is properly diversified always gains more than portfolios that are not diversified or improperly diversified.
Good points, Kevin. I went back and updated the article to make it a little clearer. My numbers were from April when I started my test, not YTD, and I was using my baseline Schwab dividend fund as the comparison, which is why the 4% figure looked so low against the S&P. You're right that different start dates and benchmarks change the picture. NANC and GOP were in a bit of slump at that point. And yes, international diversification has been strong this year. My point wasn't about building the perfect portfolio, though - it's that politicians consistently manage to beat the averages in whatever markets they touch. That tells its own story.
Kevin Yip
@Reply 8 months ago
Your Schwab fund is mainly for earning dividends, not for hoping to get higher market prices that match industry indices. If you want to match indices like S&P 500 and Dow Jones, you need to invest in index funds instead, such as SWPPX (Schwab S&P 500 Index Fund), which has risen 15% YTD, just as you would expect because that's how much S&P 500 has risen. I'm guessing NANC and GOP are composed of lots of investments in index funds as well. If there is any "insider info," it is the not-so-secret knowledge known by most investors: index funds outperform actively-managed funds most of the times. But no matter what you invest in, you need diversification: US stocks, foreign stocks, federal bonds, municipal bonds, growth funds, dividend funds, etc. I personally don't invest much in dividend funds because I try to minimize my income taxes.
Kevin wise strategy. That's how my primary portfolio and my IRA are set up, but for this I was just doing a basic test. Figured SCHD would be a good baseline.
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