A Fund That Bets Against Congress

It’s kind of a gimmick—a fund that’s in cash when Congress is in session and owns stocks when legislators leave town. But is it a gimmick that can make you money?

If you think Congress is more of a hindrance than a help, you have plenty of company. Throughout U.S. history, comedians and commentators have been taking potshots at our national legislators. Will Rogers, for instance, said he couldn’t think up half the number of funny things in his lifetime as Congress could pass in one session. Mark Twain contended that members of Congress were America’s only “native criminal class.”

Eric Singer has taken Congressional ridicule a step further. He runs an obscure mutual fund that aims to profit from the notion that Congressional bungling is so bad that the stock market will sink when legislators report to work and rally the moment they take off on vacation. “There’s all this market folklore about the January effect; the Christmas rally; the Easter rally,” he says. “I realized that there was one unifying factor with all of those rallies: Congress was not in session.”

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Kathy Kristof
Contributing Editor, Kiplinger's Personal Finance
Kristof, editor of SideHusl.com, is an award-winning financial journalist, who writes regularly for Kiplinger's Personal Finance and CBS MoneyWatch. She's the author of Investing 101, Taming the Tuition Tiger and Kathy Kristof's Complete Book of Dollars and Sense. But perhaps her biggest claim to fame is that she was once a Jeopardy question: Kathy Kristof replaced what famous personal finance columnist, who died in 1991? Answer: Sylvia Porter.