5 Most Popular Stocks Among Members in Congress

In addition to being some of the most influential legislators in the world, members of Congress are also some of America’s wealthiest individuals. According to an article published in the New York Times (NYT) in January 2015, more than half of the country’s senators and congressmen have a personal fortune of at least $1 million. In fact, financial disclosure statements from 2014 revealed that the seven richest congressmen alone are collectively worth more than $1.1 billion while the seven wealthiest senators are worth as much as $930 million. Many of these lawmakers have invested the vast majority of their fortunes into various mutual, index and hedge funds; rental real estate, privately held businesses and individual stocks.

When it comes to investing in individual stocks, both American senators and congressman tend to be well-diversified and extremely conservative in their asset allocation. The majority of them put their money into companies that have enormous market capitalizations and are more likely to withstand an economic downturn. These stocks are commonly referred to as blue chip stocks. Below we will take a look at five of the most popular stocks among the members of the United States Congress.

General Electric

With a history dating back to 1892, General Electric Co. (GE) is the eight largest publicly traded company by market cap in the United States. Its stock is the most popular among Congress, according to the Center for Responsive Politics. At the close of market trading on April 15, 2016, the company had a market valuation of a little more than $288.4 billion, as reported by Google Finance. The company is a diversified and multinational conglomerate that manufactures a range of household appliances, aircraft engines and equipment for oil and gas production. General Electric, through its subsidiary GE Capital, also provides commercial loans to businesses that need capital to grow. (For related reading, see: The 2016 Presidential Candidates and Wall Street.)

As of April 15, 2016, Apple Inc. (AAPL) was the world's most valuable publicly-traded company with a market cap of $609 billion. The company designs and manufactures its own line of personal computers and mobile phones. At the time of writing, Forbes Magazine ranked Apple number one among the world's most valuable brands. The most recently filed personal financial disclosure statements for senators and congressman show that as many as 57 members of Congress hold Apple stock in their portfolio, 35 of those members were Republicans while 21 of them were affiliated with the Democratic Party.Apple Inc.

Microsoft Corp

Microsoft Corp. (MSFT) is the third most popular stock among members of Congress. Founded as a computer company by Bill Gates, the world's richest man, and Paul Allen in 1975, Microsoft has evolved into one of the world's best-known brands in the technology world. Some of the company's most successful and recognizable products include the Windows operating system and the Microsoft Office suite of office productivity software. According to Google Finance, Microsoft's stock realized a cumulative return of 114.7% over the last five years. (Also, see: Hillary Clinton's Wall Street Ties.)

Procter & Gamble

The Center for Responsive Politics reports that 51 congressman and senators hold a stock position in the consumer goods manufacturing giant, Procter & Gamble (PG). The company was established in 1832 and has since grown into one of the country's most valuable companies. As reported by Google Finance, Procter & Gamble's stock price rose from $64.90 to $82.30 between April 29, 2011, and April 15, 2016. This equates to an annual average return of 5.34% for the company's shareholders. As of April 15, 2016, the company had a market valuation of $221.3 billion as well as a dividend yield of 3.25% when compared to its stock price.

JPMorgan Chase & Co

JPMorgan Chase & Co. (JPM) is one of the preeminent financial institutions in the world. It is also an investment favorite among members of Congress. The company engages in a number of business activities including consumer and corporate lending, securities brokerage, investment banking, commercial banking, and asset management. At the end of 2015, the company reported gross revenues of $96.6 billion dollars and a net profit of $24.4 billion, up from $21.7 billion reported in the previous year. During the 2014 congressional elections, JPMorgan Chase & Co, and its affiliates, made more than $2.6 million in political contributions to various candidates and committees. These include over $119,000 worth of contributions to the Republican National Committee, $98,300 worth of contributions to the National Republican Senatorial Committee and a total of $40,750 donated to Congressman John Cornyn's reelection campaign. (You might also like: H-1B Work Visas and the U.S. Presidential Election (PWC).)

The Bottom Line

Some of America’s wealthiest citizens work as legislators in the U.S. Congress. In fact, more than half of all congressman and senators currently serving are millionaires according to a report from 2014. Generally speaking, the members of Congress are conservative investors and mostly invest in blue chip quality stocks. At the time of writing, JPMorgan Chase, Microsoft Corp., and Procter & Gamble were some of the most popular stocks found in the investment portfolios of U.S. Senators and Congressman.

By Warren Cassell

Source: http://www.investopedia.com/articles/markets/042216/5-most-popular-stocks-among-members-congress.asp