Just what is the Strategas Lobbying Index? Find out, and you'll be keyed into an investment tool has outperformed the S&P 500 Index for 15 years and running.
As of 2012, the index had beaten the S&P 500 by 11% for 10 years straight, and 30% in 2012. It doled out an average annual return of 17.4% in both 2012 and 2013, compared to the S&P's 6%.
"It's almost in the statistically hard-to-believe category," Strategas Research Partners managing partner said to Yahoo! Finance.
His firm developed the index, which tracks the 50 companies that spend the greatest amount on lobbying as a percentage of assets. (Note: Many of the largest companies that spend loads on lobbying don't make this list, like some big banks, for instance, because their lobbying budget is such a small percentage of what they bring in.)
Savvy lobbyists consider money given to legislators as an investment, i.e., the deployment of capital in expectation of deriving profit from the same. The Strategas Lobbying Index helps a corporate lobbyist gauge the performance of its investment.
And as the index performance suggests, your Congressman is a good investment.
The Strategas Lobbying Index is also how individual investors can take advantage of all this massive lobbying spending - and these expenditures will blow you away...
How Investors Can Use the Strategas Lobbying Index
The amount of spending on lobbying reached $3.21 billion in 2013, more than double the allocation from 2000, according to the Center for Responsive Politics. The all-time lobbying spending high was in 2010, at $3.55 billion.
The Strategas Lobbying Index itself isn't available to investors, nor is the list of the 50 companies it's comprised of. However, Strategas does provide performance statistics and insight into industry trends.
Investors can follow the companies in the Strategas Lobbying Index. The top five spenders in the index are 3M Co (NYSE: MMM), Accenture Plc (NYSE: ACN), Alexion Pharmaceuticals Inc. (Nasdaq: ALXN), Altria Group Inc. (NYSE: MO), and Brown-Forman Corp. (NYSE: BF.B).
With 10 companies total, the industrial sector is the index's majority.
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Investors should make a point to follow the lobbying expenditures of both the companies already in their portfolios and potential investment opportunities - the correlation between lobbying spending and financial success is simply too great to ignore.
"I think it speaks to the fact that government is a much bigger part of the economy," Trennert said to Yahoo!Finance. "Companies are understanding better the idea that it is important... that it is a fiduciary duty to spend money and make sure your voice is heard," he says.
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Related Stories:
- Yahoo! Finance: Lobbying Works! Big Spenders Reap Big Stock Gains Says Trennert