Politicians Are Toxic For Your Investments!
That may not come as any news for most seasoned investors, but there may be a cure at hand for the damage that Congressional politicians do to us whenever they are in session.
On May 23, 2008, the new Congressional Effect Fund was created. This is a no-load fund with a $1,000 minimum.
The fund invests in the stock indexes when our Congress is out of session, and in interest-bearing accounts when they are in session. It's that simple.
A study conducted by economists at both the University of Cincinnati and the University of Missouri at Columbia found that since 1897, 90% of the gains in the Dow Jones Industrial Average came on days when Congress was out of session. Thus a dollar invested in 1897 with the strategy of going back to cash whenever Congress met was worth $216 by 2000. But an 1897-dollar invested on the reverse strategy was worth only $2 during that same time period.
The correlation was no coincidence. And why is this the case? Because when the Congress is in session, it often raises taxes on individuals and businesses; or it increases regulations that hurt publicly-traded companies.
So it may be interesting to follow the progress of this new no-load mutual fund, however, I would not seriously consider investing in the fund because of its rather extreme 1.99% expense ratio.
In any event, you can learn more about the fund by going to our "Links" section and clicking on "Congressional Effect Fund."
* * * * *
On May 23, 2008, the new Congressional Effect Fund was created. This is a no-load fund with a $1,000 minimum.
The fund invests in the stock indexes when our Congress is out of session, and in interest-bearing accounts when they are in session. It's that simple.
A study conducted by economists at both the University of Cincinnati and the University of Missouri at Columbia found that since 1897, 90% of the gains in the Dow Jones Industrial Average came on days when Congress was out of session. Thus a dollar invested in 1897 with the strategy of going back to cash whenever Congress met was worth $216 by 2000. But an 1897-dollar invested on the reverse strategy was worth only $2 during that same time period.
The correlation was no coincidence. And why is this the case? Because when the Congress is in session, it often raises taxes on individuals and businesses; or it increases regulations that hurt publicly-traded companies.
So it may be interesting to follow the progress of this new no-load mutual fund, however, I would not seriously consider investing in the fund because of its rather extreme 1.99% expense ratio.
In any event, you can learn more about the fund by going to our "Links" section and clicking on "Congressional Effect Fund."
* * * * *
posted by Bob Moser at
2:11 PM
0 Comments:
Post a Comment
<< Home