Do Members of Congress Beat the Stock Market?

Every month, another Pelosi trade goes viral. ETFs like NANC and KRUZ have turned congressional stock disclosures into an investable product. And retail investors have made “do members of Congress beat the stock market?” one of the most Googled questions in personal finance.

The honest answer is: it depends on who you’re asking about, and when. The evidence from 20-plus years of peer-reviewed research tells a story in three acts — clear outperformance before mandatory disclosure, a sharp reversal after the STOCK Act, and then a more nuanced picture emerging from two 2024–2025 NBER papers that most coverage has missed entirely.

This post walks through that evidence in order and closes with a practical framework for which congressional disclosures are worth watching and which are noise.

The Question Everyone Asks

The fascination with congressional trading isn’t new, but it has accelerated sharply since 2020. When Unusual Whales began publishing annual congressional trading reports and clips of Speaker Pelosi’s options positions went viral, retail investors started paying attention to Periodic Transaction Reports (PTRs) in a way they never had before.

Products built on that attention followed. The NANC ETF (tracking Democratic members’ disclosed trades) and the KRUZ ETF (tracking Republican members) launched to real investor demand. The implicit premise: members of Congress have an informational edge, and copying their disclosed trades could capture some of that alpha.

Whether that premise holds up is what the academic evidence actually settles — and the answer is considerably more nuanced than either the viral clips or the ETF marketing suggest. The attention is real: more than two dozen lawmakers outperformed the S&P 500 in 2024, and no member has been charged under the STOCK Act since it was implemented in 2012. But correlation and alpha are different things.

The Pre-STOCK Act Era: When the Edge Was Real

The clearest evidence that congressional trading was generating real alpha comes from two studies published before mandatory disclosure existed.

The first, by Ziobrowski, Cheng, Boyd, and Ziobrowski, examined common stock investments by U.S. senators from 1993 to 1998 and found senators’ purchases outperformed the market by approximately 12.3 percentage points per year. A portfolio mimicking Senate purchases beat the market by 85 basis points per month; a portfolio mimicking Senate sales lagged by 12 basis points per month. The authors concluded the results were “consistent with the hypothesis that senators trade on the basis of material non-public information.”

A follow-up study looked at House members from 1985 to 2001 and found roughly 6 percentage points of annual excess return, a smaller advantage attributed to House members’ more limited committee assignments relative to senators. Still statistically significant. Still a meaningful edge over passive investing.

Both studies controlled for market cap, book-to-market ratios, and momentum factors. The outperformance survived standard risk adjustments. Whatever was driving it, randomness wasn’t a plausible explanation.

What the STOCK Act Changed in 2012

The Stop Trading on Congressional Knowledge Act — the STOCK Act — passed in April 2012 and introduced mandatory disclosure of congressional stock trades within 45 days. The theory was simple: sunlight would deter abuse, and the public record would create accountability.

The academic literature picked up a clear inflection point after 2012. Two studies found the outperformance essentially disappeared.

Eggers and Hainmueller (2013) found no statistically significant outperformance using an alternative methodology. Then, post-STOCK Act analysis found congressional trading performance roughly in line with the S&P 500 on average.

The most comprehensive post-STOCK Act study came in April 2026, when Haotian Chen and Bruce Sacerdote at Dartmouth published NBER Working Paper 35041, “Capital in the Capitol: Congressional Trades Resemble Uninformed Retail Trading.” Using a dataset covering all Congress members and their immediate families from 2012 to 2023, they found that “legislators’ portfolios underperform or, at best, match market benchmarks after the STOCK Act.” More pointedly, the timing of congressional trades “largely reflects prevailing market sentiment, estimated from retail investors’ social media posts, rather than anticipating future price changes.”

The 2024 Data: Outperformance Returns — But Why?

Here’s where the narrative gets complicated. When Unusual Whales published their 2024 congressional trading report in January 2025, the numbers looked like the old days: Democratic members averaged +31% portfolio returns for calendar year 2024; Republicans averaged +26%; the S&P 500 returned +23.3%.

Nancy Pelosi’s estimated portfolio gain was 70.9% — nearly triple the S&P 500 and higher than Warren Buffett’s Berkshire Hathaway return of 27.1%. Rep. David Rouzer (R-NC) posted the largest individual gain at 149%.

The numbers are real. The interpretation requires care. Two things are worth noting before reading these figures as evidence of an informational edge.

First, the driver was concentrated tech exposure, not insider knowledge. Democrats’ outperformance came from heavy holdings in Nvidia, Amazon, and Meta — stocks that had been in portfolios for years and benefited from the AI rally that ran through 2024. Pelosi’s 70.9% gain was largely driven by long-held tech options, not fresh trades responding to non-public information. Rouzer’s 149% came from Nvidia shares purchased years earlier, not active trading in 2024.

Second, only about half of the roughly 100 actively trading members beat the S&P 500. The averages are skewed by a handful of members with concentrated positions in the right sectors at the right time. A median tells a different story than a mean.

The Critical Split: Leaders vs. Rank-and-File

The most important finding in the recent literature — and the one most missing from mainstream coverage — is that “Congress” is not a uniform category. Two NBER papers published in late 2025 and early 2026 looked at essentially the same dataset and reached conclusions that, at first glance, seem contradictory. They’re not. They’re looking at different subpopulations.

Paper 1: “Capital in the Capitol” (Chen & Sacerdote, NBER W35041, April 2026). Looking at the full universe of congressional traders from 2012 to 2023, they found rank-and-file members’ trades track financial media recommendations and retail investor sentiment rather than proprietary knowledge. Their portfolio timing matches what retail traders are doing on social media, not what someone with advance knowledge of legislation would do. The aggregate verdict: underperformance or benchmark-matching at best.

Paper 2: “Captain Gains” (Wei & Zhou, NBER W34524, November 2025). Shang-Jin Wei and Yifan Zhou took a different cut of the data: they focused specifically on members who rose to congressional leadership positions — committee chairs, party leaders, whips — and compared their performance before and after assuming power.

The result: congressional leaders outperform matched non-leader peers by 47 percentage points annually after ascending to power. Before taking leadership roles, the same members performed in line with their peers. The outperformance began precisely when the power did.

Wei and Zhou documented two distinct mechanisms driving the leader outperformance:

The political influence channel: Leaders earn higher returns when their party controls the chamber. They sell stocks ahead of regulatory actions taken by their own party and purchase shares in firms that subsequently receive government contracts or favorable legislation.

The corporate access channel:Leaders’ trades predict subsequent corporate news. They earn superior returns specifically on shares of donor-owned companies and firms based in their home states — exactly the companies where their access to management is deepest.

The Disclosure Lag Problem

Even if you’ve correctly identified a leadership-tier member with a track record of outperformance, there’s a structural problem that limits the value of their disclosures as a trading signal: the time it takes to see them.

The STOCK Act requires Periodic Transaction Reports within 45 days of the trade. In practice, GovGreed’s analysis of 103,048 trades from 348 members spanning 2012–2026 found the average disclosure gap is 49 days. More than 12% of all trades are filed even later than the 45-day legal deadline.

By the time you see a filing, the trade is nearly seven weeks old. For a stock that moved because of legislative developments, most of the alpha has already been captured by the person who made the trade — and by any market participants who spotted the information through other means.

GovGreed’s backtesting of top-tier signals (their highest-scoring A+ trades, combining factors like committee jurisdiction, political influence, and corporate access) shows a 72.7% win rate and 10.7% average 30-day excess return — promising on paper. But that’s measuring from the trade date, not from when the filing becomes public. By the disclosure date, the actionable window has typically closed. Across all congressional trades, the excess return drops to roughly 1.2%.

For more on how to read the underlying PTR documents, see our guide on how to read congressional stock trading disclosures and the broader context in our STOCK Act plain-English guide.

What Congress Itself Is Trying to Do About It

The political pressure to restrict congressional trading has been building for years, and the 119th Congress has seen more legislative activity on this front than any previous session.

According to CRS Report R48641, updated June 15, 2026, at least 40 bills or resolutions have been introduced in the 119th Congress to limit or prohibit members from owning, buying, or selling specified financial instruments. Three have advanced beyond committee referral:

The HONEST Act had the most dramatic committee journey: Republican Sen. Josh Hawley joined all Senate Democrats on the committee to advance it in an 8–7 vote on July 30, 2025, with all other Republican committee members voting against it. Sen. Peters, the lead Democratic sponsor, put it plainly: “Americans deserve to have complete confidence that federal elected officials are working in their constituents’ best interests — not their own financial interests.” The bill includes a fine increase from $200 to $500 for STOCK Act disclosure violations.

Despite the bipartisan committee vote and broad co-sponsorship, floor votes remained stalled as of Q1 2026. H.R. 7008 had 93 co-sponsors and a promised Q1 floor vote that never materialized. Rep. Chip Roy (R-TX) expressed the frustration: “That’s frustrating that we’re not moving it, and the leadership knows that.”

One reform that did pass: S.Res. 708, the Senate’s resolution banning senators and their staff from prediction market trading, which the full Senate approved on April 30, 2026.

How to Use Congressional Disclosures as a Signal (and What to Ignore)

The evidence above suggests a specific and limited use case for congressional disclosures. Here’s a practical framework based on what the research actually supports.

Focus on leadership-tier members with committee jurisdiction over the sector. The Wei & Zhou “Captain Gains” paper documented that outperformance is concentrated in leaders — committee chairs, party leadership, whips. A backbencher buying a tech stock tells you almost nothing beyond what a retail investor picking up on CNBC coverage would do. A Commerce Committee chair buying semiconductor stocks is a materially different category.

Treat a single trade as a hypothesis, not a trigger. Even leadership-tier trades reflect only one data point. The strongest signals in GovGreed’s analysis combine committee correlation, past track record, and clustering across multiple members. One filing is a flag worth watching; multiple related filings in the same sector or company are a stronger pattern. This is the same logic that governs reading corporate insider cluster buying signals.

Cross-reference with Form 4 insider filings and 13F flows. A congressional trade that coincides with cluster buying by corporate insiders (via Form 4, Code P transactions) and new positions from institutional investors (via 13F disclosures) is a triangulated conviction signal. Any one of these signals in isolation is weaker than the combination. MarketPeel surfaces all three in one place.

Adjust expectations for the disclosure lag.The 49-day average gap means you’re almost always reacting to a trade that happened seven weeks ago. Use the filing as context for a position, not as a buy-on-disclosure trigger. If the thesis still holds when the filing becomes public — the regulatory environment, the company’s position in a sector the member’s committee oversees — that context adds color to your own research.

Ignore the viral clips. The Pelosi trades that go viral are almost always long-held options positions in large-cap tech, not fresh intelligence-driven trades. The Chen & Sacerdote paper found that the average member’s timing follows retail sentiment. That’s not a signal worth following. The declining public trust in Congress — from 78% in 1958 to just 22% in 2024 — partly reflects a sense that the system is unfair, but the data says the average member isn’t beating the market. Only the leaders are.