A Look at President Trump’s Stock Portfolio
By Frank DiPietro
If you’ve ever wondered which companies President Donald Trump invested in, that’s no longer a mystery.
We recently got a different glimpse inside the Oval Office with details of investments that Trump held before becoming the president. The Office of Government Ethics released a report that covers the period January 2016-April 2017 in a financial disclosure form.
Serving presidents typically sell their stock holdings or create a blind trust to avoid conflicts of interest. The latest financial disclosure form includes publicly traded stocks Trump owned during that 16-month period (and from which he has since divested).
Three things stand out when looking at Trump’s holdings:
He is diversified, with holdings in approximately 100 companies across eight sectors that include financials, basic materials, health care and industrials.
The president used four brokerage firms to handle his investments.
The president likes dividends—almost 90 of the approximately 100 companies held paid a dividend.
A small portion of Trump’s wealth was invested in individual stocks with an estimated value of $40 million, based on calculations from Fortune. The largest investment was in Apple with holdings of $600,000 to $1.25 million. His top holdings as of May 2016:
Apple: $600,000 to $1.25 million.
Microsoft: $300,000 to $600,000.
PepsiCo: $150,000 to $350,000.
JPMorgan Chase: $100,000 to $251,000.
One thing all investors can take as a lesson from Trump’s portfolio is the importance of diversification. Here’s the breakdown of the number of companies in which he has invested: basic materials, eight; consumer goods, 18; financial, 23; health care, 11; industrials, eight; services, 15; technology, 12; and utilities, two.
By investing in many different companies across a wide variety of sectors, his holdings could market volatility and seasonality.
Trump invested with four different brokerages. Perhaps not a concern for a billionaire, but there are some advantages to using multiple brokers. For example, different brokerage firms provide different access to stock research, analysis and other investing resources. Then, there is the matter of the Securities Investor Protection Corporation, which protects investors who have cash or securities at SIPC-member brokerage firms. If a brokerage firm encounters financial trouble, the SIPC can step in to protect investors with a limit of $500,000, including $250,000 for cash. So, if your portfolio grows to exceed this protection threshold, it may be worth considering having your portfolio divided among several brokers.
Going back to Trump’s affinity for dividend payers, keep in mind that of the 10 percent annual return the S&P 500 has delivered, on average since 1928, 44 percent of those returns came from dividends, according to Standard and Poor’s.
Overall, the disclosure form gives us an interesting glimpse into the investments of the president with the reminder that even a billionaire head of state follows universal tenets like keeping a diversified portfolio.
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