Our recent post on Ron Paul’s personal investment portfolio drew a torrent of comment from readers. In this post, we’ll try to cover the main points they raised.
As a financial journalist (and registered Independent), I don’t take sides in political campaigns. But, in more than 20 years as an investing reporter, I’ve never seen a more unorthodox portfolio than Rep. Paul’s: no
Its distinctiveness alone makes Rep. Paul’s portfolio worth writing, and reading, about. But his investing approach is also noteworthy for another reason: because it points toward a profound lesson about diversification.
Many of Rep. Paul’s supporters protested, in their comments, that his portfolio has already been vindicated by its performance.
It isn’t that simple.
Congressional financial-disclosure forms report holdings only in wide dollar ranges (for example, $15,001 to $50,000). If Rep. Paul owned gold bullion, estimating his investment performance would be fairly easy. But he doesn’t; he owns gold-mining stocks instead. And since the size of each stock holding is disclosed only within a broad band of valuation, there’s no way an outside observer can derive a long-term rate of return for Rep. Paul’s portfolio (or for any other member of Congress, for that matter). We did ask for comment, but his office didn’t respond. More