Data from Quiver Quantitative suggests that if you had followed Pennsylvania Representative Dan Meuser's investment trades since August 2019, your portfolio would have generated 512% returns to date. He is among several Congress members, like Former House Speaker Nancy Pelosi and Democratic Senator Sheldon Whitehouse of Rhode Island, who made triple-digit returns over the years.
While Meuser and other Congress members who actively make profitable trades face growing criticism and potential insider trading laws, investors are increasingly tracking the impressive returns of the US government officials. Since Congress members can report trades within 45 days of execution, the date of trade completion isn't known to the public until later. Several alternate data platforms track Congressional trades and devise strategies based on the trade disclosure date, not when executed, to address the reporting lag.
Diversification Across Tech, Energy, and Finance
Meuser has an estimated net worth of $39.23 million and maintains a diversified portfolio of mega-cap tech stocks, finance companies, biotech, consumer staples and utilities leaders. Since 2019, he has increased his holdings in stocks like Nvidia, Alphabet, Walt Disney, Microsoft, Visa, and JPMorgan. The Pennsylvania representative sold Nvidia shares multiple times since 2023, possibly to realise gains, but the AI giant remains one of the top holdings in his portfolio.
According to a financial disclosure for 2022, Meuser allocated significant capital to low-cost index funds and leading biotech firms like Pfizer, Amgen, AbbVie, and Merck. Shares of all these biotech firms have gained year-to-date due to the overall market rally and accelerated spending in life sciences. Meuser also invested in consumer discretionary and defence stocks like Nike and Lockheed Martin. Meanwhile, Meuser, a government official, also has retirement savings in 401(k)s estimated between $350,000 and $750,000, much more than the average US 401(k) balance of $182,100 at the age of 60.
Robust Passive Income Streams
Meuser had several income streams, including dividends, interest payouts, royalties, and partnerships. He earned a minimum of $17,000 in 2022 from royalties and partnerships. Meanwhile, tens of thousands of dollars arrived from investments in large-cap equity growth mutual funds, high-yield bonds, and dividend aristocrats like Waste Management.
While Meuser held over a million dollars in cash across several bank and money market accounts, he had liabilities, mostly in personal loans, between $1 million and $11 million. While the Congress member had exposure to small-cap, volatile funds, he continues to work on managing market risks with ultra-low-risk debt instruments. In the latter halves of February and April of this year, Meuser purchased US Treasury bills worth between $250,000 and $500,000.
Treasury bills (T-bills) are debt obligations issued by the US Department of Treasury to raise funds for government spending, especially during budget deficits. The term for T-bills ranges from four to 52 weeks and coupon rates are fixed during auctions. Investors receive the interest payout and the principal on maturity. T-bills offer stable income and have minimal risk since the US government backs them, but returns are generally lower than corporate bonds.
Should You Copy Congressional Trades?
Meuser's overall portfolio returned over 100% in the past year, but mindlessly following their trades isn't likely the right approach. For instance, the 45-day reporting lag between trade execution and reporting becomes an issue in devising investing strategies since Congress members can request a filing extension for 90 additional days.
Quiver Quantitative CEO James Kardatzke told Business Insider that investors must "take a thoughtful approach to how you're acting on that information, given that it tends to be very noisy data."
If you are looking to copy Congressional trades, which often involve high-growth stocks with stretched valuations, teaming up with a fiduciary financial adviser can help you develop strategies that align with your risk appetite and financial goals.
Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.
