The Hottest Stocks Congress Is Trading Right Now

Whether you like it or not, members of Congress are allowed to buy and sell stocks. True, federal law prohibits them from using "nonpublic information derived from their official positions for personal benefit," and they're required to disclose their trades.

That said, it's understandable if folks don't quite trust politicians to be on the up and up when their personal fortunes might appear to be in tension with their duties as elected representatives.

Perhaps this is unfair; even cynical. But to modify a famous quote from Upton Sinclair, it's difficult to get a person to understand something when that person's salary depends upon the person not understanding it.

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Take, for instance, the uproar over President Donald Trump's financial disclosures, which showed his accounts making thousands of trades, including timely buys in chipmakers and defense contractors right before favorable federal announcements.

Meanwhile, efforts to police Capitol Hill itself stalled in September when a divided Senate blocked the House-passed Stop Insider Trading Act, leaving lawmakers free to keep trading under existing rules.

Disclosure rules are supposed to help mitigate these problems. Thanks to these requirements, the public can follow what members of the House and Senate are doing with their investments.

Before we go further, please note that this activity shouldn't be used for trading purposes.

After all, insider buying and selling at publicly traded companies is widely disclosed and analyzed, but it doesn't really tell us much. That's because insiders — the executives and board members who know what's going on — can sell for any number of legitimate reasons, from paying tuition to portfolio diversification.

When it comes to stocks, insider buying is actually a more useful piece of information. And even then, it's not exactly a screaming buy signal.

Using insider activity among members of Congress as the basis for some kind of trading system is not a rigorous idea.

With those caveats out of the way, it is indeed interesting to see which stocks, bonds and private investments are most popular with members of the House and Senate. Perhaps more interesting is how certain pols churn their portfolios, which is to be avoided if you're a retail investor.

Have a look at the table below to see which politicians were the most active traders by volume over the past 90 days, according to data from Capitol Trades.

Stocks politicians are buying and selling

Look past the municipal debt and investments in limited liability companies, and you can see that pols are pretty normal when it comes to their buys. Top-rated Dow Jones stocks, mega-cap tech names and reliable and rising dividend-payers routinely make the list of our representatives favorite names.

Both sides of the aisle like many of the hottest stocks, such as AppLovin (APP) these days, but then so does pretty much everyone else.

Interestingly, as much as Representative Ro Khanna (D-Calif.) is associated with tech investing, a number of his most recent biggest buys were stalwart blue chips such as Verizon (VZ) and American Express (AXP).

Meanwhile, Rep. Gil Cisneros (D-Calif.) picked up Abbott Laboratories (ABT), which happens to be one the best dividend stocks for dependable dividend growth.

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