The Clinton Portfolio

Interesting news yesterday about the Clintons divesting the assests in their blind trust.

They've been putting money in to a blind trust since he became president in 1993. But because she's running for president, they were forced to disclose what was in the trust.

Rather than leave their assets in items that might be controversial with the Democratic electorate--pharmaceutical companies, Rupert Mudoch's News Corporation, yada, yada, yada--they sold all of their assets and put them into cash, which given rising interest rates and a sagging market, may be fortuitous.

The rest of the news from their assets--he made a whopping $10 million from speeches and they hold money with Ron Burkle--seemed to be pretty much what you'd expect.

The Barack Obama campaign took a shot at the Clintons over the investments. From the Times:

Shortly after the Clinton campaign released the financial information, the campaign of Senator Barack Obama, the Illinois Democrat, circulated to news organizations -- on what it demanded be a not-for-attribution-basis -- a scathing analysis.

It called Mrs. Clinton "Hillary Clinton (D-Punjab)" in its headline. The document referred to the investment in India and Mrs. Clinton's fund-raising efforts among Indian-Americans.

The analysis also highlighted the acceptance by Mr. Clinton of $300,000 in speech fees from Cisco, a company the Obama campaign said has moved American jobs to India.

The Clinton campaign, I guess, caught wind of the Obama underground campaign and then outed him. (My wife works for Hillary Clinton, something I have and plan to note often here, so weigh that as you will.)

But it does strike me that the Obama campaign is reaching here. Do you really want to be seen as dissing an important ethnic group like Indian-Americans? That wasn't their intent, of course; they just wanted to dis outsourcing and what they are saying is the hypocrisy of Hillary. Still, "D-Punjab?" Would D-Tel Aviv have gone over well with Jews, like me?

Plus if you're going to piss on people who invest in a widely held stock like Cisco, you're bound to be pissing on a lot of potential supporters and contributors, too. All of this points out the difficulty for anyone, let alone politicians, of holding a portfolio that comports entirely with one's ethical and public stands. It's really pretty much impossible.

Joe Nocera, also of the Times, had a good column about this a few weeks back which I would link to if it wasn't behind the Times's annoying TimesSelect firewall.

Even the so-called socially conscious funds wind up making distinctions and choices that are suspect, he wrote. I tend to agree.

It's one more reason I'm a fan of indexing, holding one's investment in a broad range gauge of the market like the S&P 500 or a total market index.

With low overhead, simple indexing can give you the strength of the market without the volatility of individual equities or the crazy fund fees charged by the mutual funds. The returns, as John C. Bogle, the founder of Vanguard and a huge indexing advocate, has maintained are pretty impressive, arguably more than playing the stock or mutual fund game.

It's not a bad strategy for newly minted business reporters who wanted to avoid potential conflicts of interest when they signed on with newly minted business magazines or for politicians seeking to have portfolios that are above reproach.

Maybe some purists might criticize even an index-holding politicians for having 1/5000th of their equity portfolio in an objectionable company but that argument is pretty purist.

But as I said earlier, with interest rates rising and the market suffering, maybe the move to cash for the Clintons couldn't have come at a better time. Still, indexing would be a smart move for pols--and the public.