Investing for Dummies

"We Conservatives Are More Moral Than You: More moral or not, they seem to be remarkably prescient investors. High-flying mutual funds? Hedge funds only available to the big dogs? None of them can beat your local U.S. senator at picking old-fashioned equities. Mutual funds typically do about 3 percent better than the market, long term, and hedge funds rarely more than about 6 percent better, for which they charge absurdly huge management fees. But your local friendly U.S. senator? U.S. Senators beat the stock market annually by a whopping 12 percent on average, the first comprehensive study of share trading by members of the U.S. Senate has found. The academics who conducted the study looked at 6,000 stock transactions made by senators between 1993 and 1998. They noted that the senators did an especially good job of picking up stocks at just the right time - their buys were typically flat before they bought them, but beat the market by 30 percent, on average, in the year after. However, it seems the senators might have been given a helping hand. Alan Ziobrowski, a professor at Georgia State University, and his colleagues concluded that at least some senators must have been trading "based on information that is unavailable to the public". Last I heard, they call that "insider trading." And that's illegal! Could they be doing that? Ya think?" - Scott Bidstrup Letters from Exile