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Most money managers are happy when they can figure out how to beat the S&P 500 for two consecutive years. But we've discovered one investment that has crushed the S&P Index for 12 consecutive years.
And it's set to outperform broad markets again in 2014.
The correlation between this strategy and investor returns is just too powerful to simplify or dismiss.
We're not talking about a strategy that's commonly talked about. This one is more controversial than others. But it truly "follows the money."
Here's how it works.
How to Beat the S&P 500 with the Strategas Lobbying Index
To find these market-beating returns, you have to start in Washington, D.C.
In a nation where free-market capitalism is on life support, companies recognize the best way to profit is to invest directly into the best Congress that money can buy. Spending on lobbying more than doubled between 2001 and 2012, from $1.65 billion to $3.31 billion.
For that level of investment, companies naturally want a strong return.
That's why Strategas Research Partners created a Lobbying Index to measure how much return companies earn when they put money to work in Washington.
The results are staggering; the return on investment (ROI) is completely off the charts.
Strategas' Lobbying Index tracks 50 companies impacted by government decisions, and they discovered the more money spent to effect change in regulators' decisions, the higher returns have been. For every $1 in lobbying spent, companies earned a whopping $220.
The Lobbying Index has now beaten the S&P 500 for 12 years in a row, with companies' shares outperforming in double-digit territory. According to The Economist, the index has outperformed the S&P 500 by 11% a year since 2002.
And Strategas isn't the only investment research company paying attention to this startling – and profitable – trend.