How to Leverage Politician Stock Tracker for Investment Strategies?

Despite the ongoing controversy, many politicians partake in congressional stock trading. Some of the foremost U.S. politicians are active in the stock market, and Congress has consistently beaten the market on average. This guide will describe how to leverage a politician stock tracker for investment strategies and gain insight into politicians’ investing approaches that you can use. 

Why is it useful to track politicians’ stock market activity?

On paper, the stock market is almost universally available to the investing public, and one of the fundamentals of investing is that no investor has any advantage over another. In practice, however, some high-ranking officials and politicians hold positions that frequently supply them with insider information, giving them an edge at the expense of other shareholders.

Recommended video: What is Insider Trading? Explained in 2 Minutes

For example, in the wake of the global pandemic of COVID-19, a group of senators conducted controversial stock trades a few days after a closed-door meeting informing them about the adverse events. By acting upon non-public material information, they dodged financial loss and made money by buying shares in companies that might benefit from the implemented measures. 

How to track politician stock trades?

How is it possible to track politician stock trades? Since the STOCK Act was introduced in 2012, all members of Congress are legally obliged to inform the public about any significant stock transaction.

While having an official database is crucial for tracking congressional members and for ensuring transparency in congressional stock trading, manually digging through the archive for useful information can be excruciatingly time-consuming and difficult. 

That said, there are other means of gathering workable data from politician stock trades, and the best way to do this is to use a stock tracker.

How to track politician stock trades: Step-by-step

To track politician stock trades using a stock tracker, go through the following steps:

1. Find a tracker: The first step is to choose a reliable politician stock trading tracker and register an account. We recommend Finbold Signals, but you can pick whichever you think is the best;

2. Configure alerts: An effective tracker lets you set up signals and configure the politicians’ portfolios you want to monitor. This is the part that makes the difference between manual effort and a tracker: automation produces results in seconds, while manually digging through individual reports takes hours, sometimes even days;

3. Confirm the results: Double-check your results against the available information after your research to discover the root causes and fundamentals of politician stock investing. Did Congress pass a bill affecting a sector or a company? Does the trade “tell on” insider information-based trading? Any decisive conclusion can be vital in leveraging politicians’ strategies.

How to leverage politician stock tracker for investment strategies?

So, politicians commonly outperform the market by utilizing investment strategies that are out of reach to regular investors, including relying on insider information obtained through their unique position. Here’s how to use a politician stock tracker to identify and leverage their investment strategies:

1. Buying and selling sprees: The first step in any tracking process is to check whether politicians buy or sell shares in a company or sector. If politicians buy a stock, they are usually confident the price will rise. Selling a stock is less reliable as it can be done for many reasons, like getting cash to buy a property. In either case, the larger and more frequent the transaction, the stronger the signal that you need to copy;

2. Look for hotspot sectors and companies: Influential members of Congress hold positions in committees that often have insights into upcoming legislation and government contracts. The current favorite sectors include defense, technology, and energy, but this depends on the market trends and other insights. Use the tracker to see in which companies and sectors politicians invest their money;

3. Look for patterns: Once you obtain several reports, you can check for patterns, like the frequency of transactions, portfolio diversification, and whether a politician is pursuing an active or passive investing approach. Recognizing a trend or specific approach is valuable for leveraging politicians’ investment strategies;

4. Leverage analysis techniques: On a large scale, you can apply methods like technical analysis to identify patterns in the given data sets and hone the accuracy of your research by relying on politician stock trades driven by insider information.

Common mistakes when leveraging politician stock tracker for investment strategies

Relying on a stock tracker to identify and use politician investment strategies is not as simple as copying what you see in a spreadsheet. Here are some common mistakes that you should avoid:

• Failing to consider time delay: Legally, members of Congress have up to 45 days to report stock transactions. A month and a half can be quite a while, especially in the stock market, and it is essential to keep in mind the time delay between the moment when the transaction was realized and the date of the report;

• Ignoring the context: Politicians trade stocks for a variety of reasons. Although buying stock usually indicates confidence in the stock price, it can also be part of portfolio diversification, blind trust investing, or a long-term strategy. Selling is even less reliable when observed in a single instance. Therefore, it is vital to consider the context and motivation in which a trade was and evade inaccurate conclusions;

• Insufficient knowledge of forms and reports: Although the STOCK Act is the basis of all congressional public reports, it is crucial to understand its limitations and the ensuing reports. We have already mentioned the time delay, but you should also consider other details, like assets owned by spouse or dependent children and the value brackets instead of precise amounts. 

• Assuming all politicians are successful investors: Although members of Congress outperform the market on average, not every politician is a savvy investor, and not everyone has access to relevant insider information. Check the historical performance before picking your candidates, and check whether their official roles put them in a place where they can access relevant investing-related information.

The bottom line

Leveraging a politician stock tracker to leverage investment strategies allows you to benefit from informed investing done by members of Congress without risking any illegal activity, as all reports obtained with a stock tracker have already been disclosed. 

By relying on a tool like Finbold Signals to extract workable data and identify and leverage investment strategies, you can make informed decisions and trade in the steps of the most successful Congress investors.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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