This week, we asked the Invstr Community what their opinion is on politicians and their relatives having the ability to own stocks. The winner, with almost half of the votes, was the 47 percent of Invstrs who believe that politicians should be banned from owning stocks. The reports of politicians completing perfectly timed trades frustrated and angered retail investors for several years now. In a position of power, people believe that these politicians can not only know the outcomes of stocks after undisclosed policy action but also may be influenced to act on policy due to positions they already hold. For example, during the pandemic, officials knew three days before the public about a virus outbreak in Wuhan, China. Furthermore, recent reports have been released claiming that over 240 officials at federal health agencies owned a total of $9 to $28 million in stocks of drug manufacturing and biotechnology companies that won federal contracts related to Covid-19. Instances like these create questions about the just nature of federal officials and policymakers having the ability to even own any stocks.
In second place, we have the 38% of Invstrs who believe that barring politicians from owning any stocks are not fair. As valid as it may seem, completely locking all politicians and their family members may not seem like the right way to solve the issue. Several have claimed that limits on short-term trades and prohibiting investments in companies in the direct question of policy action may be a better method to solve this issue. To close out the podium, we have the 15% of Invstrs who don’t really know if politicians should be banned from trading or not. The circumstance itself is quite a difficult one to decide on a plan of action. Although we may see politicians make trades that are suspiciously timed right, sometimes we don’t have substantial evidence to prove they had the information to influence their trades. Also, it is certain that there are several thousands of these officials that do not use their information but hold long-term investments to be financially responsible. There can be a lot of subjective stipulations regarding the parameters of any laws prohibiting politicians from trading. If any policy would be enacted to bar politicians from trading, the Securities and Exchange Commission would have to carefully proceed to create the best possible outcome for all parties.
Do you think politicians have an unfair advantage in trading? Have fun and see you next time with more poll results!
- The Invstr Team 🙂