In previous posts, we’ve explored the process of picking a theme for your newsletter. This is an important process because it really defines everything that you’ll be doing as part of your newsletter business.
- It will define what goes into your portfolio
- By deciding to go broad or narrow, your theme can differentiate you from your competition
- Different themes fall in and 0ut of favor during different market cycles
- The theme can mean the difference between making a little money and making lots o’ cash along the way
So, are you looking for a fresh idea to start a newsletter? How about a new market-beating portfolio for inclusion in your existing portfolio?
Reading a great article on Compliance Building today, I stumbled upon a great idea that’s fresh, creative, requires some research, should sell well in subscription format and historically, makes investors money.
It turns out that a 2004 research piece by Professor Alan Ziobrowski of Georgia State University showed that US Senators’ personal stock portfolios outperformed the market by an average of 12 per cent a year in the five years to 1998, beating even the average return on portfolios of corporate insiders. According to the author of the study:
The results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors.
Turns out, that Federal law does require Senators to disclose their common stock transfers annually in their Financial Disclosure Reports. While this only happens on a yearly basis, the information should make for interesting portfolio composition. Stocks in blind trusts, by the way, were not included in the study, but that shouldn’t matter anyway.
So, what about putting together a portfolio comprised of the best and most ardent of picks from the U.S. Senate? You could segment out Democrats vs. Republicans. You can see how Senators are positioning themselves in front of some of President Obama’s energy plans. The study found freshman senators performed well. You could pit 1st years against their more senior peers. I dunno, could be quite interesting.
You better hurry, though. There is legislation being pushed by U.S. Representative Brian Baird to close this loophole and “prohibit securities and commodities trading based on nonpublic information relating to Congress.”
Don’t forget to check out our ebook available for free download, How to Start a Profitable Investment Newsletter. I’ve also posted important resources to build and run a newsletter.
And if you like what you see, please sign up to receive free updates from New Rules of Investing.
