It’s become something of a joke in the investment world: the extraordinary investment skill of politicians.
There are websites dedicated to tracking their performance, such as Capitoltrades.com) tracking stock trades by members of the US Congress, their spouses and senior congressional staff. Another website, Joinautopilot.com, allows you to copy trade the portfolio of US Representative Nancy Pelosi, who’s portfolio is up 65% over the last two years.
This raises the question: Do those closest to power enjoy the greatest investment advantage?
Recent events have fuelled the debate. In March 2026, more than $500 million in oil futures were traded just minutes before US President Donald Trump announced he was delaying military action against Iran. Oil prices immediately plunged while equities rallied. Earlier, during the 2025 tariff turmoil, Trump posted on social media: "THIS IS A GREAT TIME TO BUY" just hours before announcing a 90-day tariff pause that triggered a 9.5% one-day surge in the S&P 500.
While no evidence has emerged that Trump or others traded illegally, these episodes highlight the extraordinary value of political information. Government decisions on tariffs, regulation and geopolitics can move trillions of dollars in market value within hours.
Academic studies have long suggested that politicians may benefit from this information advantage. Research by Alan Ziobrowski found that US senators significantly outperformed the broader market over an extended period, raising questions about whether proximity to policy decisions confers an investing edge. More recent studies suggest this advantage has diminished since the 2012 STOCK Act tightened disclosure rules and explicitly prohibited members of Congress from using non-public information for personal gain.
Even so, websites such as Capitol Trades and Join Autopilot now track politicians' stock trades, allowing investors to follow their disclosed transactions. The popularity of these services reflects a growing belief that political insight has become a valuable investment asset.
But what if ordinary investors have no access to privileged information?
According to Alex Krainer, author of Trend Following Bible, the answer is not to predict markets but to follow them. His argument is that markets are often dominated by information asymmetry, making forecasting a losing game for most investors.
Instead, he advocates momentum investing – buying assets that are already rising and selling those that are falling.
The academic evidence supporting momentum is surprisingly strong. Decades of research have found that stocks with strong recent performance tend to continue outperforming over the following six to 12 months. Unlike forecasting economic growth, elections or interest rates, momentum relies on observable price behaviour rather than uncertain predictions.
Krainer also argues that consensus thinking is frequently wrong at major turning points. The collapse in oil prices in the late 1990s, despite widespread forecasts of shortages, and economists' failure to anticipate the global financial crisis are reminders that expert opinion can be remarkably unreliable.
The statistics on day trading reinforce the point. Studies have found that around 95% to 97% of retail day traders lose money over time, largely because they attempt to outguess the market through frequent trading and prediction.
Momentum investing – in other words, following the trend – has demonstrated its superiority over most active fund management styles.
In a world where political decisions increasingly shape financial markets, a systematic, rules-based investment approach may be the closest ordinary investors can come to levelling the playing field.
