Quick Take: The STOCK Act requires members of Congress to disclose certain stock, bond, and security transactions exceeding $1,000 within 30 days of notification, but no later than 45 days after the transaction. Tracking congressional stock disclosures can provide insights into politicians' investment activity in market-leading stocks like NetApp (NTAP) and Applied Materials (AMAT), although these trades do not guarantee future price movements.
Understanding the STOCK Act and Congressional Disclosures
If you’re looking for trading opportunities, track Congress.
Granted, your elected officials don’t have to disclose what they bought for about 30 to 45 days after the transaction, per the STOCK Act. Oftentimes, they disclose sooner than that.
Part of the STOCK Act “Amends the Ethics in Government Act of 1978 (EGA) to require specified individuals to file reports within 30 to 45 days after receiving notice of a purchase, sale, or exchange which exceeds $1,000 in stocks, bonds, commodities futures, and other forms of securities and subject to any waivers and exclusions.”
You can read more about the Act here: Congress.gov S.2038 - STOCK Act Bill Text
Key Congressional Stock Trades to Monitor
Since March, here are some of the biggest trades that were placed.
1. NetApp Inc. (NASDAQ: NTAP) — Rep. Doug Lamborn Trade Breakdown
U.S. Rep, Doug Lamborn, for example, bought $97,502 worth of NetApp (NTAP) shares on March 20, 2024. Since then, the stock ran from about $102 to $108.50 so far.
2. Applied Materials Inc. (NASDAQ: AMAT) — Rep. Jonathan Jackson Trade Breakdown
U.S. Rep. Jonathan Jackson bought $75,000 worth of Applied Materials (AMAT) on March 13, 2024. At the time, AMAT traded at around $200. It’s now up to $209.73 and still pushing higher.
Semiconductor equipment manufacturers may possess characteristics associated with economic moat stocks, such as technological advantages and high barriers to entry, making them worth evaluating for long-term investment potential.
How Retail Investors Can Track Politician Stock Purchases
These transactions happen all the time.
And if you can spot the trades and the disclosure of trades in time, you could potentially make some good money. It’s just too bad we can’t buy something, and then make a major political statement that’s sure to send a stock higher.
Investors tracking congressional trades involving dividend-paying equities can also explore potential covered-call income strategies through Portfolio Payouts, while considering the associated risks.
Frequently Asked Questions About Congressional Stock Trading
Q1: What is the STOCK Act and how does it affect politician stock trading?
A: Enacted in 2012, the Stop Trading on Congressional Knowledge (STOCK) Act prohibits members of Congress and covered government employees from using material nonpublic information for private profit. It requires disclosure of certain financial transactions exceeding $1,000 within 30 days of notification, but no later than 45 days after the transaction.
Q2: Why do investors track congressional stock buys?
A: Congressional members sit on committees overseeing major legislation, defense contracts, and technology policy. Tracking their disclosed trades helps retail investors monitor politicians' investment activity and identify sectors that may warrant further research, although these transactions do not necessarily indicate institutional interest or future stock performance.
Q3: Are congressional stock trade disclosures publicly available?
A: Yes. Congressional stock trade disclosures are publicly available through official government databases, including the U.S. House Clerk's Financial Disclosure Reports and the Senate's Public Financial Disclosure database. Investors can also use specialized congressional stock tracking platforms to review reported transactions.
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Written by Ian Cooper