It is common knowledge that Donald Trump was a well-known businessman before becoming the president of the United States of America. A few months ago, we got information about the investments that Trump had made before holding the chair of the president of the USA. The office of Government Ethics made the company’s financial information available to investors by releasing a report that covered the time period from January 2016 to April 2017. This report gives an inside to President Trump’s stock portfolio.
The presidents who are in governance generally give away the ownership of their assets or create a blind trust to avoid conflict of interest. The latest financial information report contains information about the President Trump’s stock portfolio which has the stocks he owned that were traded publicly during that period of 16 months (and from which he has divested).
A Presidential Stock Portfolio:
The following things highlight themselves when we take a look at President Trump’s stock portfolio:
- He has stock holdings in 100 different companies across eight sectors which diversify from financials to basic materials, to healthcare, and industrials.
- A large portion of Trump’s stock portfolio is invested in relatively large cap stocks. The smallest company he owns is an oil refining company Phillips66.
- He used four different financial institutions to handle his investments.
- The President like dividends. Almost 90 of the 100 corporations under his stock holdings made payments as dividends.
- President Trump has invested most of his money into value stocks which tend to do better when the market drops.
Trump’s stock portfolio shows that he has invested only a small portion of his wealth in the stock market. $91.5 million out of his proclaimed $10 billion net worth is invested in the market. $40 million of his investments were made into individual stocks according to Fortune. His largest investment was into Apple with holdings of $600,000 to $1.25 million. A few companies in which the President has significant shares include Microsoft with holdings of $300,000 to $600,000, PepsiCo with $150,000 to $350,000, and JPMorgan Chase with holdings of $100,000 to $251,000.
One thing that is clear when we take a look at President Trump’s stock portfolio is that he likes to make investments in diverse sectors. This diversification helps his stocks to take the blow when the market drops. His holdings could bear the disturbance caused by market volatility, seasonality, and other factors.
The following is a list of the areas of his investment:
- Basic Materials: 8
- Consumer goods: 18
- Financial: 23
- Healthcare: 11
- Industrials: 8
- Services: 15
- Technology: 12
- Utilities: 2
President Trump invested through four different brokerages. Although most billionaires do not take this thing into account, having multiple brokerages can be quite useful.
Since a brokerage facilitates the buying and selling of stocks by providing information about stock research, analysis, and other investing resources. One very obvious advantage of having multiple brokerages is that one broker platform could be totally different from the other. One could help you close your positions early or prolong your expiry. And the other could keep the trading hours open for a longer period of time.
Then there also comes the advantage of multiple SIPCs (Securities Investor Protection Corporation). A SIPC protects against the loss of cash and securities held by the customer at a financially troubled SIPC member brokerage firm. If a firm comes across financial problems, a SIPC steps in to protect the investors with a limit of $500,000 with $250,000 which it gives in cash. In case you have stock holdings that exceed this amount of money. It is smart to have your business divided among multiple brokers.
Also, if you have ever encountered technical difficulties while making trades, you can simply use your other account to do that.
One More Thing:
There’s a reason for Trump liking dividends. According to Standard and Poor’s, since 1928, out of the 10 percent of the average annual return the S&P has delivered, 44 percent came from dividends.
This financial disclosure shows that even billionaires follow the worldly trends of having more than one brokerages for safety purposes. They also invest in diverse areas to make more profit.
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