Investing Basics

We all know that Congress is only too happy to “invest” our money. But how are they when it comes to managing their own? Not so great, as it turns out. A review of the personal financial disclosures filed by members of the U.S. Senate and House of Representatives gives some insight into just how bad these politicians are at managing money. The table below shows the 15 most popular stocks held by members of Congress, with the number of owners to the right: If $1,000 had been invested in… Read More

We all know that Congress is only too happy to “invest” our money. But how are they when it comes to managing their own? Not so great, as it turns out. A review of the personal financial disclosures filed by members of the U.S. Senate and House of Representatives gives some insight into just how bad these politicians are at managing money. The table below shows the 15 most popular stocks held by members of Congress, with the number of owners to the right: If $1,000 had been invested in each of the 15 most popular stocks held by Congress on Jan. 1, 2008, the entire portfolio would be worth $10,148 today, a loss of -32.3%. This exceeds the total loss of the S&P 500 index, which has fallen -31.7% in the same period. In fact, only one of the companies, IBM, has shown a positive return, though nine companies posted smaller losses than the benchmark, losses that could have been made smaller still with reinvested dividends. As you… Read More

The Securities and Exchange Commission has issued new rules about short selling, a strategy investors employ when they think a security’s price is going to fall. The two new rules don’t restrict short selling and won’t affect individuals or “short” or “ultrashort” exchange traded funds, at least not yet. The SEC plans an industry roundtable in September to discuss other proposals that could limit the practice, which has come under scrutiny after criticism that it drives down stock prices. Short and ultrashort (read: “leveraged”) exchange-traded funds allow… Read More

The Securities and Exchange Commission has issued new rules about short selling, a strategy investors employ when they think a security’s price is going to fall. The two new rules don’t restrict short selling and won’t affect individuals or “short” or “ultrashort” exchange traded funds, at least not yet. The SEC plans an industry roundtable in September to discuss other proposals that could limit the practice, which has come under scrutiny after criticism that it drives down stock prices. Short and ultrashort (read: “leveraged”) exchange-traded funds allow an investor to bet on a price drop. The funds are popular because they can be held in a typical brokerage account rather than transacted through a margin account, the vehicle through which short sales typically take place. One new rule calls for more reporting of short sales to increase the amount of information available to the public. Wall Street’s self-regulatory agencies will publish daily short-sale transaction reports that detail the total number of a company’s shares were shorted. After a month, the data would be… Read More