Now, before I start, I will say that I still have a lot to learn, and I am putting most of my budget into index funds for now. While I occasionally trade on single companies and stuff when I have a strong feeling, and so far I've mostly been correct, I usually don't put much money on it. I'm also not a day trader. I work a lot and simply don't have the time in the day right now. So I assume we all know that members of congress basically do legal insider trading, and have consistently extremely high returns as a result. So finding the most successful ones and copying all their trades seems like a no brainer right? And there are entire apps that let you track and automatically copy politicians trades for you. Of course, I see many issues. Not the least of which is the fact that they have 45 days to disclose their trades, at which point it can very well be far too late. That seems like it can be a huge problem. BUT sometimes, they do disclose their trades pretty quickly. I'm looking at quiver right now (October 20th), and there are some that are pretty recent. I see trades made on Oct 16, 12, 9, etc. So my first thought is: What if I were to only copy trades that were both made within the last week or so, and that were done on companies who's stocks seems not to have changed much since the trade was made. That way, I can weed out the problem trades and copy them more consistently. That certainly seems more reasonable to me, and I've thought about it a bit. But I still see problems. Politicians aren't omnipotent, so ofc they make bad trades too. That is always cancelled out by all their good trades though. But if I am cherry picking only certain trades, I am not getting the full spread they have, and I won't be nearly as diversified. So that could theoretically end up backfiring. Idk, lmk what you think about this one. So yeah, there's some issues. But then at the same time, I go around on the internet and see people who tested out the strategy themselves. One particular YouTuber used one of those apps that automatically copy them, meaning they were definitely coming in late on some trades. And yet, even though their portfolio took several dips along the way, over time, this YouTuber made some substantial gains. I've seen some others do the same. So maybe it's actually kinda effective? But at the same time, I've seen others say that it DOESN'T work. And besides, some of those YouTubers could be sponsored by the apps for all I know. So I still don't trust it. But most of all, my gut just says it's too good to be true. "Get rich quick with zero effort!" is historically a HUGE red flag. So my question is, what are your guys's thoughts? Have any of you tried this, and how'd it go? While I admit I am intrigued, I am nowhere near confident enough in this to put actual money in it. This reddit post is just one part of the research I'm doing on this. So, what do you think? TLDR: Politicians have 45 days to release their trades, so you could possibly be jumping in at the worst time. Sometimes they do disclose within a week or so, so if you only copy the trades made recently on stocks that haven't yet moved much since the initial purchase, your chances are maybe better? But then your portfolio will be way less diverse than the politicians. But despite these issues, I've seen people claiming that those apps that automatically copy every politicians trades have worked very well for them. They took some hits, but if they were patient and waited, they got great gains. Seems to good to be true though, and I'm not one to blindly trust strangers on the internet. So, stranger on the internet, what do you think? Have any of you tried this, and how'd it go? I just want some outside input.
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