Should You Copy Politicians’ Trades? | AWM Insights #216

Key themes from the episode

• Delays of up to 45 days between a politician’s trade and public reporting make it almost impossible to accurately replicate their investment results.

• Academic studies show politicians, as a group, underperform market benchmarks, and ETFs like NANC and GOP tracking their trades have lagged the NASDAQ by 17% and 53%, respectively.

• Building enduring wealth demands an integrated, disciplined playbook—not speculation around headline trades.

Copying politicians’ trades is a headline-grabbing idea, but reporting lags, incomplete data, and consistent underperformance against benchmarks prove it’s not a foundation for multi-generational wealth.

Reporting delays limit any actionable edge

In both professional sports and wealth management, precision makes the difference. Politicians report their trades on a 45-day delay—an eternity in the markets. By the time you learn of a trade, prices have often shifted dramatically, eliminating any potential edge. These reports aren’t detailed, offering only broad dollar ranges. Matching positions or weighting a portfolio? Nearly impossible. Even with perfect hindsight, you’re forced to guess on timing and amount. That’s not a playbook; that’s guesswork without a clock.

Data from academia and real-world products

The numbers are clear: politicians’ trades don’t outperform. Academic studies show underperformance as a group compared to broad market benchmarks. Productizing the idea into ETFs hasn’t solved this. The NANC ETF, which tracks trades of Democratic politicians, has trailed the NASDAQ by 17%. The GOP ETF, focused on Republican trades, has underperformed by over 53%. Tack on higher expense ratios and tax inefficiency due to frequent trading, and any remaining return is further eroded. Outliers make headlines, but as a team, the results speak for themselves.

Discipline and integration drive long-term success

Headline trades and speculation make for an inconsistent strategy. Professional athlete families and 100-year families build success on discipline, integration, and expert stewardship. Wealth endures when every part of the plan—taxes, estate, investment, lifestyle—is aligned and executed with rigor, not when chasing trends.

Champion your wealth with a unified strategy

Election cycles, hot news, and fleeting trades come and go. True wealth, like championship seasons, is built with patience, integration, and a roster of specialists. With the right team and the right game plan, your legacy won’t hinge on headlines.